By Paul Timble, Director, Westlawn Business Services 22 October 2014
Would you describe your business as cutting edge? Are you an innovative farmer looking for better ways to make your land more productive while also protecting the environment? Or perhaps you’re putting valuable resources into research and development to produce a better product or technical service? If your company focus is on doing business smarter, you may just be eligible for some government assistance.
To encourage innovation, increased production and positive outcomes for the environment, government bodies offer progressive businesses a variety of grants, tax incentives and other assistance.
R&D Tax Incentive
One such program is the R&D Tax Incentive which is designed to encourage more businesses to conduct research and development into producing better products and technical services. The program is available to businesses across all industry sectors and of all sizes. You don’t have to be a large company with the resources to pour millions into research and development to participate.
The R&D Tax Incentive is available to eligible tax-paying Australian companies involved in either manufacturing or the provision of technical services. The program allows the business to offset the costs of research and development by enabling the business to gain a credit on tax payable. Or, for businesses with less than $20 million per year in tax loss, to access up to 45% of their eligible research and development expenditure as a tax refund. The R&D Tax Incentive is uncapped.
To be eligible to receive the R&D Tax Incentive, the business must conduct at least one core R&D activity.
Core R&D activities include those activities where the business attempts to do something or manufacture something that hasn’t been done before and therefore requires experimentation employing the scientific method.
Core R&D activities could include, for example, testing a new or improved product, device, process or service.
The R&D Tax Incentive is just one program designed to assist innovative businesses. There are many other programs that may also benefit your business, depending on the work you’re conducting.
Other government assistance programs
The following is a selection of government programs that your business may be eligible to participate in.
Farm Innovation Fund The Farm Innovation Fund provides loans to meet the cost of carrying out permanent capital works that will have a significant beneficial impact on the land, provide long term profitability of the enterprise and address adverse seasonal conditions.
To be eligible, applicants must own or operate the property where the work is to be carried out. Additionally, the farm must provide at least 50% of the applicant’s total gross income and applicants must not have off-farm assets exceeding $5,000,000.
Carbon Farming Initiative The Carbon Farming Initiative allows farmers and land managers to earn carbon credits by storing carbon or reducing greenhouse gas emissions on the land. Credits can then be sold to people and businesses wishing to offset their own emissions.
Ethanol Production Grants Ethanol Production Grants encourage the use of biofuels in transport in Australia. To be eligible, ethanol must be produced in Australia entirely from locally derived biomass feedstock (including biomass waste and residues) by the grant recipient which is to be used in, or as, a transport fuel in Australia.
Applications are open until 30 June 2015.
Blue and Green Business Program The Blue and Green Business Program provides assistance for projects that result in the use of reclaimed wastewater, rainwater and/or grey water, as a permanent substitute for potable water.
Eligible,projects must reduce the demand for water from the Rous Water regional water supply system (Lismore, Byron, Ballina and Richmond Valley).
Regional Visitor Economy Fund The Regional Visitor Economy Fund supports investment in product development and marketing activities in the regional NSW visitor economy on a matched dollar-for-dollar basis with the aim of doubling overnight visitor expenditure by 2020.
Applicants must be registered for GST and located in regional NSW. For more on the program, including further eligibility requirements, visit the Destination NSW website.
Emerging Renewables Program The Emerging Renewables Program supports renewable energy and enabling technologies and products as they move through the technology innovation chain.
To be eligible,theapplicant must be an Australian entity incorporated under the Corporations Act 2001.
Cleaner Fuels Grant Scheme The Cleaner Fuels Grant Scheme encourages the manufacture or importation of fuels that have a reduced impact on the environment. To be eligible, applicants must be a registered importer or a licensed person. Cleaner fuels must meet the applicable fuel standard under the Fuel Quality Standards Act 2000.
To find out more, visit the Australian Taxation Office website.
Westlawn Business Services Pty Ltd provides this information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation.