What to do when your accountant says, “It’s not worth it.”? It’s pretty simple really – get a second opinion.
Thousands of businesses know that claiming the R&D Tax Incentive is money for jam. However, your accountant may have discouraged you from claiming the R&D Tax Incentive. Why would they do that? This article answers that question and more.
What is the R&D Tax Incentive?
The Research and Development (R&D) Tax Incentive is a Federal Government initiative that has existed since the mid-1980s. It provides significant financial support to companies that invest in innovative research and development activities. It’s used by government to incentivise companies to invest in R&D due to the many positive spill over effects that has on the economy as a whole.
How does it work (basically)?
The R&D Tax Incentive provides SMEs with a refundable tax offset if they engage in eligible R&D activities. This offset is a percentage of the amount invested in R&D and is designed to encourage businesses to invest more in innovation.
Why is the R&D Tax Incentive considered money for jam?
For companies that are eligible, the R&D Tax Incentive can result in either a refund of real cash (i.e. money in your account), wipe off your company’s tax bill, or at least put a significant dent in it. It’s money for jam because it’s a boost in cashflow without having to do any additional work or sell any additional products. You qualify by virtue of the things you do in the course of your every-day business. Who wouldn’t want that?
Why do some accountants discourage you from claiming the R&D Tax Incentive?
There are a range of reasons, many of which amount to a lack of true understanding. Most accountants could not accurately answer the following questions: Which activities are considered to be R&D? Which expenses can you include? How hard is it to prepare an application? What is the process for claiming the tax incentive? How long does it take? Will it be successful? How much will you get back? Will it make you more likely to be audited?
We forgive them, because it is a specialist area and that’s why you should take specialist advice.
What can a company do if their accountant say it’s not worth it?
If a company’s accountant says that the R&D Tax Incentive is not worth claiming, it is important to get a second opinion. Specialist R&D tax advisors (like BridgePoint Group) have a deep understanding of the program and can help companies identify all of their eligible R&D activities. It is more wide-ranging and adds up more quickly than you might think. If you do R&D it’s almost always worth it. Another option is for companies to conduct an R&D review themselves. This involves reviewing their operations and identifying any eligible R&D activities that they may have undertaken. The company can then use this information to prepare their own R&D Tax Incentive claim or engage a specialist advisor to assist with the claim.
If you would like to engage an R&D Tax Incentive specialist to determine whether or not your company qualifies for the R&D Tax Incentive then please send an email to Alan Baghdasarayan or give us a call at 1300 656 141 who will provide a free 30-minute consultation.