Can Karen Andrews Deliver?
Since being reappointed Industry Minister little over 3 months ago, Karen Andrews has set herself a new task – to improve the administration of the R&D Tax Incentive within AusIndustry in order to give companies greater certainty about the R&D claims that they lodge.
No doubt that this new task comes off the back of the recent Moreton Resources case that the taxpayer successfully won in the Full Federal Court, as well as the recent Ombudsman investigation into the ATO clawing back millions in R&D refunds from Australia’s SME community.
Karen Andrews seems to be tackling the issue from a very practical and positive perspective.
The Industry Minister’s objective is to provide a greater level of certainty to the community regarding the administration of the R&D Tax Incentive by AusIndustry, which is good news for the government, economy and broader innovation community.
- From a government perspective, providing greater certainty to companies claiming the R&D Tax Incentive ensures that the R&D claims that are lodged articulate clearly how the submission satisfies the legislative criteria. This should significantly free up AusIndustry’s time in reviewing claims where the company has been vague in their R&D descriptions.
- Secondly, from an economic perspective. The greater certainty provides confidence in the market that Australia is indeed committed to encouraging innovation. The greater flow-on effects of the R&D Tax Incentive aside, it proves that the Australian economy is committed to the underlying objective of the scheme – to encourage industry to conduct R&D activities that might otherwise not be conducted because of an uncertain return from the activities, in cases where the knowledge gained is likely to benefit the wider Australian economy.
- Third, and most importantly, the greater certainty provides the innovation community with the confidence to embark upon R&D projects here in Australia, instead of looking to offshore the developmental work. Again, the broader impact of this aspect is tremendous and cannot be understated.
As Karen Andrews begins her task of improving the administration of the R&D Tax Incentive, she knows that she has the full support of the R&D Tax Incentive community.
The R&D Tax Incentive
Often described as one of the most crucial support initiatives for small businesses and start-ups in Australia. The R&D Tax Incentive refund provides a lifeline to the cash-strapped start-up community, and this cash injection allows the start-ups to continue with their innovation lifecycle when they may otherwise have folded the company due to lack of cashflow.
At BridgePoint Group, we are optimistic about the innovation trend in Australia, and we’re hopeful that greater clarity regarding the R&D Tax Incentive can be achieved in due course.