The Research and Development (R&D) Tax Incentive is a Federal Government initiative that has existed since the mid-1980s that provides financial support to companies that invest in innovative research and development activities.

Many businesses consider that claiming the R&D Tax Incentive is money for jam. However, not all accountants see it that way.

Let’s will explore why some accountants may not recommend claiming the R&D Tax Incentive, as well as what companies can do if they are told it’s not worth claiming.


Why is the R&D Tax Incentive considered money for jam?

The R&D Tax Incentive provides SMEs with a refundable tax offset (i.e. cash refund for companies that are pre-revenue or in tax losses) 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. The R&D Tax Incentive is a lever used by government to incentivise companies to invest in R&D due to the many positive spill over effects that it has on the economy as a whole.

For companies that are eligible, the R&D Tax Incentive can result in either a cash refund, wiping out a company’s tax bill, or putting a significant dent in their tax bill. This can be seen as money for jam because it is essentially a boost in cashflow without having to do any additional work or sell any additional products.


Why do some accountants say claiming the R&D Tax Incentive is too hard?

In short, it’s quite simple – they don’t know enough about it and it’s easier to throw it in the too hard basket.

Also, some accountants fear that by arming their clients with this knowledge that the client will get angry at them for not knowing sooner and may leave them for another practice.

Other accountants would rather just stick to what they know. Stay in their lane, and not branch out of their comfort zone and point their clients in the right direction for help.


Why is dealing with BridgePoint Group different?

At BridgePoint Group, we help take the burden off your shoulders so you can focus on your company’s core business. We work for you in order to limit your team’s time involvement in what is a very specialised area of tax. At BridgePoint Group we will conduct a full outsource offering that will include:

  • Providing unlimited support during the claim lodgement process;
  • Hold meetings (or teleconferences if preferred) with the relevant staff so as to ascertain the scope of the R&D activities conducted;
  • Consider all of the information available, and make suggestions regarding the scope and detail of the technical documentation that you keep on file;
  • Limit your team’s time involvement (~2 hours from start to finish) so as to allow you to focus on your core business operations;
  • Prepare a thorough R&D Project Report that will detail the objectives of the project, new knowledge generated, areas of technical uncertainty, and activities conducted;
  • Prepare and lodge the R&D Application Form with AusIndustry;
  • Liaise with AusIndustry so as to retrieve the Notice of Registration;
  • Calculate the eligible R&D expenditure and provide a detailed costing workbook to you explaining how the benefit has been derived;
  • Prepare and lodge the R&D Tax Incentive Schedule with the ATO; and
  • Provide a Management Letter that details the claim preparation methodology as well as the outcomes and benefits associated with lodgement.


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 reach out to Alan Baghdasarayan, Head of Innovation Advisory at BridgePoint Group or call 1300 656 141 who will provide a free 30-minute consultation.


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