Government Experiments with R&D Tax Incentive Lodgement Easing

R&D Tax Lodgement Deadline Extended to 30 September 2020

The Federal Govt has acknowledged that many businesses have been impacted by COVID-19 and the summer bushfires, and that tax is the last thing they need to think about as they get back on their feet to get their business operating again.

The Australian Tax Office (ATO) has extended the timeframe for registering Research & Development (R&D) Tax Incentive claims for the 2018-19 income year, with the new deadline for lodgement being 30 September 2020 instead of 30 April 2020 for those businesses with a 30 June income year.
 
While the impacts of COVID-19 apply, businesses with different accounting periods will also have a five-month extension to the timeframe for their R&D Tax Incentive applications. And if a business is unable to lodge their application by 30 September 2020, they may apply for an extension of time.

This extension is welcomed by claimants and consultants alike, as the normal 30 April deadline would not be practical for many businesses in the current market conditions.

For the purpose of the tax incentive, R&D is considered to be experimental activities that are conducted for the purpose of generating new knowledge. As this term is relatively broad, R&D can be applied to a wide range of industries, including information and communications technology, life sciences, fast-moving consumer goods, engineering, etc.

The R&D Tax Incentive provides a substantial cash benefit to companies conducting Australian-based R&D activities. And whilst the R&D Tax Incentive is aimed at onshore R&D, there are certain circumstances under which offshore R&D activities are also eligible for the tax incentive.

It is a positive move by the Government to allow this extension in these challenging business circumstances. 

Given the enhanced focus on manufacturing, agriculture and innovation resulting from the COVID-19 pandemic, we would welcome additional research and development incentives to boost these industries. 

A robust research and development sector would provide a further kick-start for businesses and the Australian economy as it recovers from the economic effects of the COVID19 pandemic. 

If you need further information around eligibility or applying for R&D Tax Incentives, please reach out to BridgePoint Group’s R&D specialist, Alan Baghdasarayan, on 1300 656 141 or alan@bridgepointgroup.com.au