Important R&D Tax incentive considerations for last minute April 30 lodgements

March 12th, 2014

Changes to AusIndustry R&D Application introduced October 2013

30 April 2015 is the R&D Tax Incentive lodgement deadline for companies wishing to claim eligible R&D conducted during the year ended 30 June 2014.

Companies who submitted their 2013 claims near last year’s deadline should be aware of changes to the registration application introduced in October 2013. This includes the additional requirement for:

  • Details of the new knowledge intended to be produced by the core activities and how this is different from current knowledge in the relevant field;
  • Details of how the outcome of the registered core activities could not have been known in advance based on current knowledge, information or experience;
  • Details of how each core activity can be shown as an experiment including a statement on the relevant hypothesis, experiment, observation and conclusion;
  • Details of how supporting activities contribute to a corresponding core activity.

Whilst the changes will render the need for additional information to ensure registration compliance is sufficed, the extra requirements will provide companies with a chance to carefully consider their R&D and whether activities may withstand a subsequent review of eligibility.

The additional requirements also mean companies should be assessing their 2013 R&D activities now to ensure applications are processed to an adequate standard <Learn More>

Use of Feedstock Worksheet within Company Income Tax Returns

A feedstock adjustment must be included in a company’s assessable income when Tax Offsets for R&D Expenditure are obtained on products which are marketable or applied to a company’s own use. The addition to assessable income for feedstock adjustments was a key new requirement of the R&D Tax Incentive Regime.

Recent updates to the company income tax return will require companies to complete a feedstock worksheet outlining the basis of any relevant feedstock adjustment. Whilst this represents additional compliance, we strongly encourage careful consideration of feedstock worksheets <Learn More>

Legislative Update – Quarterly Credits for Small Companies

Tax Laws Amendment (2013 Measures No.4) Bill 2013 proposed to provide quarterly payments to companies who received net refunds from their annual R&D claim. This legislation has stalled and will not likely be passed as law.

Legislative Update – Exclusion for Very Large Companies ($20 Billion Turnover)

The proposed section 355-103 ITAA1997 will if legislated, prohibit access to the R&D Tax Incentive for very large companies with assessable income in excess of $20 Billion.

Last year, this proposed amendment was referred to the Senate Economics Legislation Committee to assess the consultation process undergone by the previous government. Last month, the Senate heard from those with differing viewpoints on the issue and is now due to release its final report and recommendation between the 17th-22nd of March.

Although the proposed section is yet to be enacted as law, the general consensus is that it will indeed be passed by 1 July 2014 <Learn More>

Swanson Reed is proud to be part of the Senate Inquiry. Click here to view our submission.

Update – May 2014 Budget

The May 2014 budget will be the first handed down by the new coalition government and will likely incorporate cuts to many government programs. Whilst details are limited at this point, there are not expected to be any further changes relevant to R&D Tax Incentive program.

About Swanson Reed: 

Please do not hesitate to contact us or the following people on 1800 792 676

 

Upcoming Workshop Series

Accessing the R&D Tax Incentive Safely PART II:
Exploring AusIndustry Audit and AAT Substantiation War Stories Feedstock Disclosures within Company Tax Return

Swanson Reed is pleased to offer part II in the ultra successful workshop series “Accessing the R&D tax Incentive Safely”: Exploring AusIndustry Audit and AAT Substantiation War Stories. <Learn More>

 

Location Dates Register
QLD – Brisbane 25th March Click here to register
QLD – Mackay 23rd July Click here to register
QLD – Townsville 25th July Click here to register
NSW – Sydney 21st March Click here to register
VIC – Melbourne 2nd April Click here to register
SA – Adelaide 21st October Click here to register
WA – Perth 1st April Click here to register

Are you Eligible?:
Are you Eligible to claim costs under the current R&D Tax Incentive? Check out our Eligibility Wizard to find out.

Calculate your R&D Tax Entitlement:
Estimate your potential entitlement for FY13 with our R&D Tax Benefit Calculation Tool.

Could you pass an AusIndustry Audit?:
Can you handle an AusIndustry Audit? Take our questionnaire to find out.

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