As April 30 was a Saturday this year, companies are still able to lodge the registration of their R&D activities today (Monday 2 May 2016). To claim the incentive, you need to register your R&D activities with AusIndustry within 10 months of the end of the final year. For most companies operating in June – July fiscal year, this date traditionally falls on the April 30 deadline. However, as noted above, since this was on a Saturday, companies are able to lodge on Monday 2 May 2016.
If you intend to register and claim the R&D Tax Incentive, you must keep adequate records to demonstrate to the ATO and AusIndustry that you did carry out eligible R&D activities and that you did incur eligible expenditure. With higher levels of review activity and scrutiny by AusIndustry and the ATO, it is vital that companies are able to substantiate their R&D claims with contemporaneous documentation.
Nonetheless, registration is the critical first step in accessing the R&D Tax Incentive. In order to be able to claim the benefits of the R&D Tax Incentive, a company must register their R&D activities with AusIndustry. These activities can either be classified as core R&D activities or supporting R&D activities. Core R&D activities are the experimental activities undertaken to generate new knowledge. Whereas, supporting R&D activities are the activities that relate directly and support your core R&D activities (e.g. literature searches).
By capitalising on the opportunities that the R&D tax incentive offers, companies can produce generous tax savings, including generating cash for their past and future investments or developments. In addition, there is no cap on the level of eligible R&D expenditure that a company can claim. Companies with annual turnover of less than $20 million can claim the 43.5% tax offset on all their eligible expenditure. Those with annual turnover of more than $20 million can claim a 38.5% tax offset on all their eligible expenditure. However, to claim these benefits a company must register their activities by today. Don’t miss out on generating potential tax savings for this financial year.
AusGrant specialises in the R&D Tax Incentive – contact us today to discuss your eligibility and learn more about how the R&D Tax Incentive may benefit your business.