Research is where innovation starts
Business Advisory Services Update
How many of your clients miss out on claiming the Research and Development (R&D) Tax Offset because they are unaware of the rules that relate to claiming legitimate R&D expenditure?
Firstly, they have to be a company to be able to claim the R&D Tax Offset. Regular communications with your clients by generally enquiring what they are doing should give you a “heads up” that they are proposing to undertake some kind of project.
There are record-keeping requirements that should be implemented from very early in the process. This will help develop a habit relating to R&D activities. This should also ensure that your client has no problems with the ATO or AusIndustry over any aspect of a R&D Tax Offset claim.
A company needs to have spent more than $20,000 on R&D activities in the financial year, and has all of the records pertaining to the time spent by team members, external consultants and contractors.
Incidentally, another key matter is that the $20,000 expenditure can be on more than one project – it can be on many projects as long as the records are being kept.
A company with a turnover under $20million is able to claim a R&D Tax Offset, calculated at 43.5% of the legitimate R&D expenditure. If the company is trading at a loss, it can receive a “cash refund” of the amount of the R&D calculated offset amount, if the accumulated tax losses are higher.
ESS BIZTOOLS has developed a full product package, to assist accountants to render advice on a wide range of business financial matters for SMEs, such as R&D.
Visit www.essbiztools.com.au to find out more, or contact us on 1800 232 088.
