Australian innovation is the way of the future and the government is pushing to support the home-grown ideas boom.
Australians are an innovative bunch. We've invented the Hills Hoist, Victa lawn mowers, black box flight recorders, and codes for WIFI – just to name a few.
There has never been a better opportunity for SMEs to flourish.
Big business has traditionally held the upper hand, taking the lion's share of federal funds and support for quite some time. However, as the big end of town continues to fire people to improve profit margins, SMEs are the ones that are hiring, and are what keep the economy ticking over.
The federal government has acknowledged this shift with a change in policy that lends greater support to SMEs. Some noteworthy benefits include a new range of tax concessions, grants, and a $20,000 capital write-off. And that's just the beginning.
Last year, the federal government handed out 14,000 of these R&D incentives. However, an estimated 76% of eligible small businesses, didn't claim.
The most under-utilised grant, however, is the research and development tax incentive grant. It provides a generous tax-offset of 40 to 45 per cent for SMEs engaged in R&D activities. Last year, the federal government handed out 14,000 of these R&D incentives. However, an estimated 76% of eligible businesses, didn't claim.
Unfortunately, this usually stems from a lack of information, the belief that they're not qualified, or the false perception that "it's all too hard."
Let's blow some of these fallacies out of the water.
The research and development tax incentive grant is a viable way to recuperate a fair portion of your investment into the R&D of new products, services, and technology within Australia.
The R&D grant is not industry-specific; this is not just about science, medicine, and software. To date, industries that have been successful in receiving the grant include accounting, engineering, recruitment, solar, finance, mining, electrical, health, education, marketing, and construction. Their common denominator? A new and fresh idea, method, or product.
A great deal of money is invested in creating, trialing, and testing products, methods, and ideas. So if you've spent $20,000 or more in a financial year in R&D activities, you could be eligible for this incentive.
The application is lodged with your tax return, so eligibility for the 2015/16 financial year ends in April 2017.
There's a wealth of SMEs that would qualify – you would be amazed at what falls under the umbrella of "innovation." Most people are shocked that they've never attempted to claim, or have never been encouraged to do so.
With the government's latest push, it's now much easier for SMEs to access the R&D tax incentive grant, and receive a much-needed leg-up for their business, with a generous cheque from the tax office.
For more information about the grants available to you, visit www.igniteinnovation.com.au