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Posted By: R&D SmartTax

If ever there was an exercise in patience, working with Australia’s New R&D Tax Incentive would have to be it. After months of patiently waiting for legislation to be passed, then Royal Assent to be received, then information briefings to be held, you would think we were now well equipped to take the new R&D rules and start working with them.  Not quite.

For all the detail that has been released through legislation, Explanatory Memoranda, Fact Sheets, guidelines and case studies, there are still many areas that are uncertain and will require much more guidance before companies can confidently apply the rules to their own situation.

Most of these uncertain areas affect the scope of the eligibility to claim. This means that while you may have a pretty good idea that your company and project will be eligible for the New R&D Tax Incentive, just quite how much you can claim is still debatable.  For example, the boundaries of which activities will be eligible as Core R&D activities including the design of experiments are quite uncertain. Further, the “hot tub” of experts that meet regularly to discuss these areas are also still working through areas such as the design of the Advance or Overseas Findings form, an item that is expected to be a key tool companies will use to gain certainty prior to registration.

The reality is that many of these details and extra guidance will not be available into well into the new year after January or February 2012.

This means that while we are almost 4 months into the 2012 financial year and we are itching to plan and make adjustments to our businesses for this new “incentive” program, we are going to have to treat 2012 as a transition year.  Most companies are being encouraged to continue business as usual, maintaining good records as they go and to otherwise sit tight until more information is forthcoming.

To this end our top three tips to make sure your company is on track for your claim are as follows:

1) record all labour hours contemporaneously. Labour-related R&D claims will be the winner with the new R&D Tax Incentive, so make sure you are tracking your hours as you go as this will maximise your claim.

2) record all experiments in detail. Write down what you learned by undertaking the experiment, what equipment was used and for how long.

3) research your technology status. Undertake patent, literature or google searches to demonstrate the newness of your ideas. Make sure to print and record all your findings.

R&D SmartTax’s Template Package is a great starting point to make sure you are capturing your information for your claim. Our Labour Record will help you record your hours contemporaneously and the R&D Trial Record will ensure all the details are captured for your experiments. To download our Template Package, please click here.

To keep up to date with the latest information about the R&D Tax Incentive, please email us at [email protected] and we will add you to our mailing list.

Posted By: R&D SmartTax

I bet you didn’t think you could produce an investor grade business plan in just one day? Neither did we until we happily discovered Business Planning HQ, an Australian owned business that is storming the world with its unique, smart yet simple process towards producing business plan documents and securing investor funding for smart companies.

In the month of September alone its clients secured over $1.3 million USD and the success stories just keep growing.

Business Planning HQ was developed to provide an alternative to the two traditional ways of creating a business plan; using a consultant, or buying software/ a template. 

  • Consulting approaches do not always meet financial constraints of cash strapped ventures, and the results can be highly unpredictable.  Additionally this approach still takes a surprising amount of time from the business founder.
  • Software and templates have generally not been developed by those that have actually raised capital.  They are often owned and developed by software companies as just another market to sell their software.  Templates are highly variable in quality and do not ask the tough questions that investors will.

The HyperQuestion Approach is different.  The starting point was interviewing investors about what they need to know about a business to make an investment.  These investor questions were then turned into a series of questions that a business founder could easily answer.

R&D SmartTax was so impressed by Business Planning HQ that it has formed an exciting new alliance partnership. R&D SmartTax’s approach has always been to make access to funding easier and more affordable and Business Planning HQ definitely achieves this goal. Alongside the Government’s New R&D Tax Incentive, investor funding is a vital way for small, smart companies to continue to invest in innovation and technology advancement, thus helping keep Australian businesses competitive on the world stage.

To find out more about Business Planning HQ and get your Business Plans done today Click Here.

Posted By: R&D SmartTax

Australia’s New R&D Tax Incentive is here and as of 1 July 2011 any projects undertaken now fall under the new R&D Tax Incentive rules.

With a 45% refundable (cash) tax offset on offer for SMEs the new R&D Tax Incentive has the potential to provide enormous cash advantages to any company who is generating new knowledge, products and services in any industry throughout Australia.

So to find out if this new program can help your business, we invite you to attend R&D SmartTax’s FREE Webinar on the New R&D Tax Incentive on Tuesday 27th September 2011 at 11am EST.

To register for this FREE Webinar please click here.

During the Webinar you will learn:

  • what the new eligibility rules are for entities and projects
  • what expenditure qualifies
  • how the 45% refundable and 40% non-refundable tax offsets work to reduce your tax liabilities and provide extra cash to your business at tax time

Places are limited so please act now to register for this free event. For any questions about the New R&D Tax Incentive, please feel free to contact us at [email protected].

We look forward to seeing you there!

Posted By: R&D SmartTax

We can reveal that Australia’s New R&D Tax Credit program was given the official green light on Tuesday 23rd of August 2011 after passing through the Senate virtually unchanged.

The only amendments to the legislation proposed by the Labour Government in 2010 were the change of the start date of the legislation to 1 July 2011 and also the introduction of a quarterly payment system for SMEs receiving the refundable tax credit.

This means that small to medium companies with a turnover less than $20m that have been undertaking R&D activities since 1 July 2011 can now earn an increased benefit of 45% as a refundable tax credit, up from the previous 37.5% rate. Large companies also receive higher incentives with an increased benefit of 40% as a tax credit equating to around 10% compared with the previous 7.5% benefit.

For all companies intending to make claims under the New R&D Tax Credit it is important to know that this is an entirely new scheme with the rules substantially different to those known under the previous R&D Tax Concession or R&D Tax Offset schemes. Key changes include:

  • new definition of eligible R&D
  • new tests for supporting activities
  • new application of feedstock rules
  • new rules surrounding software R&D
  • new rules surrounding overseas R&D
  • new categorisation of expenditure for the ATO
  • new application process

These changes affect all industries and will require all companies to examine current R&D activities to ensure compliance with the new R&D Tax Credit.  However it is important not to rush into any review as AusIndustry will be providing important guidelines in the coming weeks and months that will help with the application of these new rules to specific industries.

Our suggestion in the meantime is to keep on business as usual, continue to keep good records for your R&D activities, particularly labour costs, and where possible, make time to sit with an R&D specialist in the next month or so to get advice for your business situation.

Although there are many changes, it will certainly be possible to obtain good benefits under the New R&D Tax Credit, and we look forward to providing you with more specific information as it comes to hand.

Please do not hesitate to contact us at [email protected] if you have any comments or queries. And don’t forget to put in your R&D claim for 2011 now.

Posted By: R&D SmartTax

Tuesday 16th August 2011 is the date many are expecting Australia’s New R&D Tax Credit program to finally come before the Senate. This is almost 12 months after the first draft of the legislation came before the House of Representatives in September 2010.

With the Department of Innovation Industry Science and Resources Minister Kim Carr having proclaimed an official start date of the New R&D Tax Credit as 1 July 2011, the Senate session in August is expected to finally provide the means for the upper house to pass the two bills required to put the New R&D Tax Credit in motion.

However even at this late stage there is still some uncertainty as to what format the legislation will take. Latest talks with members of Senator Carr’s ministry as well as Treasurer Wayne Swan’s team suggest that while many of the key aspects of the new program such as the 45% and 40% rates of the credit will not change, other important areas such as the feedstock provisions may still have time for adjustment.

The scope and application of the proposed feedstock provisions may effectively prevent many manufacturing activities that are being claimed under the current R&D Tax Concession and R&D Tax Offset programs, from being eligible in the New R&D Tax Credit.

At a point in time where the Federal Government is trying to encourage support for Australian manufacturing industry in the wake of the proposed Carbon Tax, such restrictions could prove to be a double whammy for many small to medium businesses.

Until the final format is known however, the advice of all the experts continues to be “business as usual”.

Are you confident that you are maximising all you can claim in your 2011 R&D Tax Claim? R&D SmartTax has all the up-to-date tools and templates to ensure your business gets every cent it is entitled to. Click Here to view the Template Package now.

Posted By: R&D SmartTax

Queensland based companies can get excited about a new round of grant funding from the Queensland Government. The Smart Futures Fund is back after announcement about the program in the Budget on 27th June 2011.

From 1 August 2011 companies can apply for a range of programs, some brought forward from prior years, some new. The programs are:

  • Proof of Concept Fund
  • Co Investment Fund
  • Research Partnerships Program
  • Local and International Fellowships
  • Commercialisation Champions

There isn’t much time until the first round of funding so companies interested in applying need to act fast. For more information visit the Smart Futures Fund on the Queensland Government website here.

If you would like any assistance with these grants or any of the Federal Government R&D tax assistance programs, please make sure to contact us at R&D SmartTax at [email protected].

Posted By: R&D SmartTax

R&D SmartTax is proud to host Webinar 2 in its free 3-part series for small business accountants on Calculating R&D Expenditure and Deductions. This Webinar will take place on Tuesday 26 July 2011 at 11am EST.

In this detailed and practical webinar you will learn:

 – how to identify eligible R&D expenditure

 – how to categorise expenditure into ATO categories

 – how to calculate eligible R&D deductions

 – how to calculate the exact amount of R&D benefit your client will receive

 – how to maximise R&D tax claims, and

– what to do to minimise compliance risk

There will be plenty of practical examples to help you better understand the boundaries of what is and isn’t included in an R&D tax claim as well as tips on how to really maximise client R&D benefits. In addition, we will also cover how to generate new revenue for your accounting practice with R&D tax claims, creating a win-win situation for you and your client.

Please Click Here to Register Now For Webinar 2: Calculating R&D Expenditure and Deductions.

Posted By: R&D SmartTax

R&D SmartTax is proud to announce a brand new Template Package along with 4 new templates to help manage all aspects of compliance for R&D Tax Claims.

Our existing Template Package was one of our most popular products and included the R&D Plan and R&D Calculations templates for the R&D Tax Concession and R&D Tax Offset programs.

The 4 new templates we have added to these two favourites are as follows:

1. R&D Trial Record

2. R&D Learnings Report

3. R&D Labour Record

4. R&D Substantiation Checklist

The R&D Trial Record helps to document results and learnings from experimental activities using plant assets and is particularly important if you wish to claim expenditure for experiments. Both AusIndustry and the ATO have been known to focus on this area of compliance with the outcome being a disallowed claim if adequate records do not exist.

The R&D Learnings Report goes beyond the realm of R&D to actually form an important learning document to help your company manage, save and use the results from its projects for maximum benefit. It is particularly useful if there are staff changes and your company doesn’t particularly wish to “reinvent the wheel” the next time the project comes about.

The R&D Labour Record is a popular tool that is used to record employee time on R&D projects in a timely and contemporaneous manner. Most companies use this on a weekly, fortnightly or monthly basis. Again, this is critical for the ATO to verify labour costs where no timesheets are used.

Finally, the R&D Substantiation Checklist contains a list of all supporting records required to back up your R&D tax claim, to give you an easy, single point of reference for your compliance records.

For those familiar with our R&D Calculations Template, this has also been updated to include a new section to help calculate company overheads. Company overheads are sometimes overlooked when adding up your R&D tax claim, but they can actually be a way to easily maximise your claim.

Our R&D Templates are all tried and tested and we are confident that companies using them will greatly improve their records for R&D tax compliance.

Click HERE to Access the Template Package and make sure your R&D tax compliance is up to date.

Posted By: R&D SmartTax

The Federal Government has confirmed that the New R&D Tax Credit will officially commence on 1 July 2011, although the legislation has yet to pass parliament. This brings an end to much uncertainty for businesses who had been told that the rules for the New R&D Tax Credit would apply retrospectively to 1 July 2010. Now companies can proceed with their 2011 R&D Tax Claims with confidence, knowing that they can claim under the tried and true R&D Tax Concession and R&D Tax Offset programs.

The Government has also promised a sweetener for small to medium businesses with the introduction in 2014 of a quarterly payment system for the R&D Tax Credit instead of the usual lump sum cheque. This will help with the management of cashflow through the year.

With crossbencher support now available is is hoped that the Government doesn’t rush the legislation through without key changes to the complex and potentially unfair feedstock and dominant purpose provisions. With 1 July only weeks away, the more certainty that can be provided to companies wanting to step up investment into Australia’s lagging economy, the better.

For the full media release, please see below. And to get ready for your 2011 R&D Tax Claim, including a FREE eligibility analysis, please visit R&D SmartTax here.


15 Jun 2011


Joint media release with the Treasurer, the Hon Wayne Swan MP.

Australian companies will become more innovative and globally competitive thanks to the new R&D tax incentive.

The Gillard Labor Government’s $1.8 billion R&D Tax Credit will deliver more funding to innovative firms – including manufacturers, ICT and biotech – increasing productivity and Australia’s national income.

This builds on Labor’s policy reform agenda of the past four years and will be a major benefit for businesses that innovate and use R&D as a platform for future growth.

Today we welcome crossbench Senators announcing their support which means the parliamentary road-block put in place by the Coalition will finally be removed.

The new and improved Credit will target more funds to genuine R&D deserving of public support – good news for industry and better value for taxpayers.

It will deliver a 45 per cent refundable tax credit to companies with an aggregated turnover of less than $20 million and a 40 per cent non-refundable offset to all others.

This will allow more firms to benefit from our massive boost to the innovation, science and research budget, helping them grasp the opportunities of our transition to a cleaner economy.

We welcome the commitment of industry, the Greens and independent parliamentarians who have put good policy ahead of political posturing in supporting this reform. 

The development is the culmination of an extensive consultation and negotiation process.

Following discussions with the Greens, the Government will introduce quarterly payments for small and medium businesses from 1 January 2014. These firms will get their credit sooner, significantly improving their cash flow and incentive to invest in R&D.

The deferral of the start date to 1 July 2011 has an overall impact of $40 million, with a negative impact of $310 million in 2011-12 and a positive impact in 2012-13 of $270 million.

The Government will continue to work in partnership with the business community to get the most from this landmark reform. An advisory group will be established through the Innovation Australia Board to monitor the implementation and operation of the Credit. The Government, through AusIndustry, will run an extensive education program to ensure firms are kept up to date.

A printable version of the media release [PDF 97KB] is available.

Posted By: R&D SmartTax

R&D SmartTax is proud to advise it is hosting a new Webinar Series starting on Tuesday 21 June 2011 at 11am EST. The first topic is a Practical HowTo on R&D Tax Basics for Accountants for 2011 which is timely with the forthcoming commencement of the 2011 R&D tax claim season after 1 July.

Caroline Hughes, Managing Director of Hughes Group Services Pty Ltd and creator of R&D SmartTax will be presenting each Webinar, aimed at providing as much practical information and tips possible on how accountants can maximise R&D tax claims for clients whilst minimising the compliance risk.

Webinar 2 is on the details of R&D Expenditure Calculations and will be held in July on a date to be confirmed whilst Webinar 3 will be all about the much anticipated New R&D Tax Credit and will be held in August.

Although the end of the financial year is a busy time for all accountants it is hoped that the extra knowledge gained from the Webinars will help prepare accountants for client queries regarding R&D tax claims. Further, Caroline also aims to clarify how R&D tax claims can help provide additional revenue for both accountants and their clients in 2011, creating a nice win-win outcome in a usually compliance driven area of income tax.

All 3 Webinars are free to attend.  To register for Webinar 1: R&D Tax Basics for 2011, please click on the link below. We look forward to seeing you then!

About R&DSmartTax

R&D SmartTax tools were born out of a desire to help the many smart small Australian companies access the R&D Tax Break benefits without the need for hours spent reading tax literature or expensive consultant fees. The R&D Eligibility Wizard is designed to be low cost, easy to use and available for all Australian industries.


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A. Blauensteiner
Australian Institute of Commercialisation

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