Research and Development Tax Incentive (R&D)
What is the Research and Development Tax Incentive?
The Research and Development Tax Incentive (R&D) offsets certain costs of a company in carrying out eligible R&D activities. It is not a competitive grant but a targeted tax offset or rebate of expenditure. The program reduces the cost and risk of undertaking R&D activities for your business and incentivises companies to create new or improved products, processes, and services.
Melrose International has been having unprecedented success with claiming back eligible expenditure for new products, procedures and services under the Research and Development Tax Incentive (R&D) which may be applicable to your company.
We structure the claim by assisting you in identifying eligible projects for R&D and maximising all the eligible expenses you are entitled to for the grant submissions. We then write up your projects and lodge your application under the guidance of our registered in- house Tax Agent & CPA who will adhere to the strict guidelines required and expected by the government bodies. A Registered Tax Agent is a legal requirement for consultancy since the R&D Tax Incentive is a tax-based program. It is important to note that Melrose International does not provide tax advice, but works with highly experienced tax agents who can discuss information directly with your accountant.
What is Eligible R&D Expenditure?
Most expenditure related to R&D activities is deemed eligible expenditure and includes but is not limited to: Salaries – Overheads – Contractor Costs – Feedstock – R&D Plant Depreciation – Materials – Raw Ingredients – Modification to Equipment – Travel Expenses for Sourcing.
What is Eligible R&D Activity?
Your R&D activity must bear technical and financial risk to you and you alone must influence or control the conduct and direction of the R&D activity. You must either own or have effective ownership of the R&D results which will include the right to exploit the results. Activities must be undertaken within Australia but if approved under certain conditions, overseas activities may be deemed eligible by Ausindustry prior to them occurring overseas.
It is difficult to cover off every conceivable type of project, but in assessing whether a project is eligible, we need to address the following:
- Were you testing a hypothesis?
- Did you undertake systematic, investigative, and experimental processes? That is, to test the hypothesis you needed to design a new process and then test and trial the process to evaluate its performance.
- Is the project innovative? Were there points of novelty in the project? If you designed a testing process from scratch for example and can point to clear differences between your process and standard industry processes, then you should be able to identify
- Were the outcomes of the project unknown at the outset of the project? If you didn’t know what the end result would be and were uncertain about the eventual outcome. Not knowing what would work to give you the outcome you needed to conduct trials and tests, can demonstrate that eligible activities were undertaken.
All expenses relating to the research and development of a new product or service where the outcome/knowledge of, is not readily available elsewhere. In other words, you need to be researching how to make something – a product or do something – a service. It needs to be a product or service that requires experimentation of ingredients/materials (the substance that makes it) or process (the way in which it’s done) that involves trial and error /testing until the desired “new” outcome is achieved
To find out more please contact Melrose International on firstname.lastname@example.org.