On Monday the Turnbull government released the much anticipated Innovation Statement. The agenda involves 24 measures and is pitched to be a prototype for revolutionising Australia into a society that is innovative. However, as we mentioned yesterday, despite the anticipations of many, the R&D Tax Incentive has no changes mentioned in the plan. Nonetheless, the Innovation Statement did announce a new independent body, Innovation Science Australia (ISA), who is expected to conduct a review in 2016 of the R&D scheme.
In the meantime, entrepreneurs have highlighted the benefits R&D has on innovation and how it is a vital tool for start-ups. James Wakefield, co-founder of InStitchu.com.au, articulated to the Business Insider that “the R&D grants and incentives as they stand in Australia have made it worthwhile committing to growing an Australian-based business… The Australian government is already is extremely supportive and the current R&D model highlights the importance that they are placing on growth and innovation remaining in Australia.”
In addition, Adrian Di Marco, executive chairman and founder of TechnologyOne stated that, “start-ups need to recognise the importance of ongoing R&D investments, and need to continuously improve and evolve their products to meet market demands. Through R&D, start-ups can continue to reinvent themselves and their business to keep pace with changing technologies and market developments. At TechnologyOne, our significant investment of 20 per cent of revenue back into R&D ensures we are encouraging local and sustainable innovation.”
Certainly, as the above reveals, there is no denying that the R&D tax concession is one of the largest single support policies for innovation. Despite there being a possible changes to the scheme when ISA becomes effective in July 2016, in the interim, the R&D Tax Incentive remains the same and offers valuable support to companies. Thus, businesses should still participate in R&D business activities as per normal and can still obtain generous tax benefits from their R&D investments. If you think your company may be eligible, please contact AusGrant to learn more about the R&D scheme.
