R&D Tax Incentives and Grants — How To Maximise The Opportunities For Your Startup

In collaboration with Next Money and The York Butter Factory we recently ran our 4th masterclass. This time we invited EY in to discuss the R&D tax incentive and other grants available to startups.

The E&Y team discussing the R&D tax incentive and other gran opportunities

There are approximately 700 business grants available available to startups between the 3 layers of government in Australia (local, state and federal). This combined with the R&D tax incentive provide startups with many opportunities to gain government assistance when building out their companies. However, the length of applications, the speed of process times and rejection can be off putting to startups.

Having said this, for startups who are able to have their applications accepted it can be a game changer. This is precisely why we wanted to have our friends from EY come down and speak about the how to navigate the incentives and grants landscape.

During the session E&Y covered off on the R&D Tax Incentive and other available grants. Below is a brief summary of some of the incentives and grants discussed.

R&D Tax Incentive

Recently, the R&D tax incentive has come under scrutiny by the ATO with a number of Tax Payer Alerts being released.

Having said this, it still remains a key incentive for startups conducting experiments for the purpose of generating new knowledge. More broadly, according to the Department of Industry, Innovation and Science, it aims to:

  • boost competitiveness and improve productivity across the Australian economy;
  • encourage industry to conduct R&D;
  • provide business with more predictable, less complex support; and
  • improve the incentive for smaller firms to engage in R&D.

The incentive provides a 43.5% refundable tax offset for companies if they have an annual turnover of less than $20 million on R&D expenditure of $100 million or less in total.

For more information, CLICK HERE.

Entrepreneurs’ Programme

This program replaced Commercialisation Australia and the former Innovation and Investment Fund. The program provides advice and support for companies — including mentoring advice, co-funding grants to commercialise products, services and processes and funding to take advantage growth opportunities.

There is also assistance available for export assistance, product commercialisation and incubator support.

These programmes are part of a competitive process that requires startups to submit applications to gain funding.

Most applications are ongoing. CLICK HERE to find out more.

Export Market Development Grant (EMDG)

The Export Market Development Grants (EMDG) scheme is designed to provide financial assistance for aspiring and current exporters. The grant covers a broad range of industries, sectors and products. Its aim is to encourage Australian SMEs to develop export markets

The grant reimburses up to 50% of eligible export promotion expenses above $5,000 provided that the total expenses are at least $15,000.

It is worth noting that EMDG applications have a due date. Check out the EDGM website for further information.