Be innovative with your business plan
Grants and Tax concessions – have you thought about them as part of your business plan and strategy? With the federal government’s push to support innovation and the ideas boom incentive, there is no better time.
Big business has taken advantage of federal funds for a long time. However, as the big end of town continues to fire people to improve profit, it is small to medium businesses that are hiring people and keeping the economy ticking over.
The federal government has acknowledged this shift with a range of support for SMEs from tax concessions to grants, the $20,000 capital write-off and many more.
The most under-utilised is the research and development tax incentive, which is a tax-offset between 40% and 45%. Last year, the federal government handed out 14,000 R&D incentives. It is estimated that approximately 76 % of small businesses eligible for it don’t claim it.
It is because they are unaware of it or think they are not eligible or believe “it’s all too hard”.
Let’s blow some of these fallacies out of the water.
The research and development tax incentive is a way to recuperate a fair portion of your investment into R&D of new products, services and technology within Australia.
These products, services and technology can be from any industry. This is not just about science, medicine and software. To date, industries that have been successful include engineering, accounting, finance, recruitment, solar, electrical, mining, health, education, agriculture, technology, biotechnology, marketing and construction –you name it, every industry has innovation.
The common denominator is a new method, idea or product.
Australians are innovative – we invented the Hills Hoist, Victa lawn mower, cochlear ear, code for wifi and black box flight recorder, to name a few.
To invent a new method, idea or product; money needs to spent on creating, trialling and testing it. If you have built something new you usually have spent dollars on this innovation. If it is $20,000 or more you could be eligible for this incentive.
The application needs to be lodged with your company tax return, so incentives for the financial year 14/15 closed in April.
However, you can start and plan for next year. Some of these plans will need to be in place by June 30, as you need to have certain criteria to be eligible such as being a company and paying yourself a salary.
There are many SMEs that would qualify, you will be amazed at what is deemed as innovation, Some people are shocked that they have never done it before or been advised to do it.
It is important that you receive the right advice and application support from advisors, who specialise in grant applications. Some advisors have free assessments and only charge a success fee.
With the government’s latest push to support SMEs, it is much easier to access the R&D tax incentive and receive a leg up for your business through money back from the tax office.