October 26th, 2022
The new Labor Government has handed down their first budget in October 2022.
Leading into this budget, there was not anticipated to be any changes proposed to the R&D Tax Incentive, since the previously announced changes for FY22 had only recently been legislated by the previous Coalition government, and were passed with support from the (then) Labor Opposition.
Based on a preliminary review of the October 2022 budget material, no material changes seem to have been proposed to the R&D Tax Incentive, which is good news!
- In the budget papers for the TREASURY PORTFOLIO, the budgeted expenses for the Research & Development Tax Incentive are noted as:
- 2021-22 Estimated actual: $3,082,936,000;
- 2022-23 Budget: $3,042,461,000;
- 2023-24 Forward estimate: $3,046,611,000;
- 2024-25 Forward estimate: $3,181,329,000;
- 2025-26 Forward estimate: $3,333,985,000.
- The budget papers for the INDUSTRY, SCIENCE AND RESOURCES PORTFOLIO mainly discusses the Research & Development Tax Incentive in terms of registration performance measures and Annual administered expenses;
Some other measures announced in the October 2022 Federal Budget that may indirectly impact on R&D Claimants include the following:
- Buy Australian Objectives;
- Funding for skills and training;
- Tax Practitioners Board – compliance program to enhance tax system integrity:
- The Government will provide $30.4 million to the Tax Practitioners Board (TPB) to increase compliance investigations into high-risk tax practitioners and unregistered preparers over 4 years from 1 July 2023.
- Extension of ATO Compliance Programs – Tax Avoidance Taskforce:
- The boosting and extension of the Tax Avoidance Taskforce will support the ATO to pursue new priority areas of observed business tax risks, complementing the ongoing focus on multinational enterprises and large public and private businesses
The new Labor government should be commended for leaving the R&D Tax Incentive unchanged for now, and hopefully stability is maintained when they hand down their next budget in May 2023.