R&D Tax Incentives Services

About R&D Tax Incentives

Most democratic nations have some form of a research and development program designed to incentivise businesses to invest in future technologies and innovations. Governments offer these incentives because new technologies create jobs, stimulate the economy, and drive national productivity. In Australia, this initiative is called the R&D Tax Incentive (RDTI), which provides businesses with financial support in the form of a tax credit or tax offset through the tax system. This program encourages companies to invest in research and development, helping them bring new ideas to market while fostering economic growth and technological advancement.

The R&D Tax Incentive is jointly administered by AusIndustry, part of the Department of Industry, Science and Resources, and the Australian Taxation Office (ATO). AusIndustry oversees the registration of R&D activities, ensuring that the activities undertaken contribute to new knowledge and meet eligibility criteria. The ATO is responsible for verifying the accuracy of the claimed expenditure, ensuring businesses receive the correct tax benefit. Together, these agencies ensure that the incentive operates effectively while maintaining compliance and transparency.
Eligible companies can apply for the R&D Tax Incentive from the 1st of July each financial year for eligible R&D activities and expenses incurred in the previous financial year. Businesses have up to ten months (until the end of April) each year to lodge their claim. For example, a company lodging a claim on 1st July 2024 can apply for eligible R&D activities and expenditures incurred during the 2023-24 financial year (1st July 2023 to 30th June 2024).

Each year, over 12,000 Australian companies claim the R&D Tax Incentive, with total R&D expenditure exceeding $11.5 billion annually. Notably, around 48% of claims come from small businesses, demonstrating that access to the incentive is not limited to large corporations. However, strict eligibility requirements must be met before a company can submit a claim. Businesses must carefully assess whether their activities meet the government’s criteria and ensure they are documenting their work correctly to qualify for the benefit.

To be eligible, companies must have a minimum of $20,000 in R&D-related expenditure (unless working with a registered Research Service Provider) and can claim up to a maximum of $150 million. The benefit received varies based on the company’s annual turnover and financial position. Businesses with a turnover under $20 million may receive a refundable tax offset, meaning they can receive a cash refund of their corporate tax rate plus an 18.5% premium, equating to a benefit of between 18.5% and 43.5%. Companies with a turnover exceeding $20 million receive a non-refundable tax offset, which is calculated based on their R&D intensity (the proportion of total business expenditure allocated to R&D). There are two premium increments:

R&D intensity up to 2% receives a tax offset equal to the company tax rate plus 8.5% premium.
R&D intensity above 2% receives a tax offset equal to the company tax rate plus 16.5% premium.

To accurately calculate your estimate R&D benefit, try our R&D Calculator tool.

Navigating the R&D Tax Incentive can be complex, and with the responsibility of compliance resting on company directors, working with an experienced R&D tax consultant is crucial. The program is self-assessed, meaning errors in eligibility, documentation, or expenditure allocation can lead to penalties, audits, or the need to repay benefits. Engaging a registered R&D tax agent with expertise in your industry significantly reduces these risks while ensuring you maximise your eligible claim.

At prmpt., our team of specialist R&D consultants has a proven track record of securing R&D benefits for businesses across technology, manufacturing, biotech, software, and other innovative sectors. We provide end-to-end support, from eligibility assessments to audit-ready documentation, ensuring your claim is accurate, compliant, and fully optimised. With our direct, results-driven approach, we simplify the process, allowing you to focus on innovation while we handle the complexities of your R&D claim.

We also provide a range of free tools and resources, including an R&D Eligibility Test and R&D Calculator, to determine whether a company qualifies for the incentive and estimate the potential tax benefit.

Why Choose prmpt. for Applications & Consulting?

In order to be eligible for the R&D Tax Incentive, your business entity must at a minimum:

Be incorporated under Australian or foreign law- Have eligible R&D expense greater than $20,000 (unless you are a registered Research Service Provider) for the relevant financial year
Be conducting eligible R&D activities that include (but are not limited to):
- Researching the development of potential products due to a lack of public knowledge available
- Creating new products or services that are unique to your industry
Improving or modifying a product, service or process OR changing the way it is produced by developing new knowledge
Developing new knowledge/methods of completing tasks where the outcome is often unknown
Maintain accurate supporting documentation and evidence of eligible activities & expenses

Your questions answered

What is R&D?

The Research & Development (R&D) Tax Incentive is Australia’s single largest government incentive. Australian companies creating new and novel products or services can utilise R&D to claim back a proportion of their eligible expenditure as a cash refund or tax offset, including costs associated with R&D applications and efforts to secure R and D grants in Australia.

With a comprehensive strategy and the correct execution, the R&D Tax Incentive can provide cash flow and support to grow innovation within your company.

How much can I get from R&D?

Hypothetical Example <$20 million annual turnover

If your annual turnover is less than $20 million, you’re eligible to claim 43.5% on R&D expenditure as a cash refund.

Your company turnover is $3,000,000
You have $1,000,000 in eligible R&D expenditure
Therefore you will receive a refundable tax offset of $435,000 ($1,000,000*43.5%)

Hypothetical Example >$20 million annual turnover

If your annual turnover is greater than $20 million, you’re eligible to claim 38.5% on R&D expenditure as a tax offset.

Your company turnover is $22,000,000
You have $4,000,000 in eligible R&D expenditure
Therefore you will receive a non-refundable tax offset of $1,540,000 ($4,000,000*38.5%)

See our R&D Calculator

What does the R&D Tax Refund Calculator do?

Our R&D Tax Refund Calculator helps you estimate your potential R&D tax refund based on your company’s turnover and R&D expenditure, including costs related to R&D applications and R and D grants Australia. It provides a clearer picture of what financial benefits you might expect.

Is every business eligible for R&D tax incentives?

Not every business qualifies. Eligibility is determined by various factors, including the nature of your operations and the kind of research and innovation you’re undertaking. To easily check if you qualify, you can use our Eligibility Test.

Take our R&D Eligibility Test

Why do I need an R&D consultant?

R&D consultants can use their existing knowledge to effectively execute your R&D claim promptly
Lodge your claim with confidence that the activities meet the eligibility criteria and the proper due diligence has been performed
We have several years of experience in R&D across several industry sectors
Avoid distracting your internal team from their core work by having a team of experienced R&D consultants working on your claim in the background
De-risk losing company Intellectual Property (IP) that often sits with one employee and leaves the company when they do
Use our expert knowledge and advice to maximise your R&D benefit and achieve the highest level of compliance

How often should I consult with my R&D tax consultant?

It varies depending on your business needs. However, with prmpt., we typically engage in regular consultations, either fortnightly or monthly, to ensure a smooth process and that no R&D opportunity is missed.

Is R&D guaranteed?

Whilst R&D is a self-assessed program, it is not guaranteed from an audit/review by AusIndustry. Our job is to ensure your R&D application is eligible, that all costs are captured/maximised and that you have the supporting documentation to substantiate your claim.

Can prmpt. help with government grants beyond R&D?

Absolutely! Our consultants are always on the lookout for new grants suitable for your company. As these become available, we offer advice, application assistance, and management services in addition to R&D consulting.

How long does it take to process an R&D application?

Depending on how quickly we can obtain all the required information from yourself and your team, an R&D application can be processed by us in 2-3 weeks. Then allow for an additional 1-2 weeks for the R&D refund/offset to be issued by the ATO.

How much do you charge for your services?

As every client and their business is different in terms of size, requirements and work involved, our proposals are tailored to each client’s individual needs. Depending on if it is just an R&D application, government grant or both we can discuss fees for our services and a model that best suits your business.

Feel free to contact us for a quote.

What makes prmpt. different from its competitors?

We spend a considerable amount of time ensuring your R&D activities are compliant in relation to the latest guidance and tax legislation.
We educate your team by creating an R&D sensitive team culture, ensuring nothing is missed throughout the year, especially concerning R&D application and R and D grants.
We engage with you on a regular basis and complete the required work throughout the year as opposed to the traditional once a year catch up that is becoming more heavily scrutinised by the governing bodies. As soon as lodgement dates open we can submit your application to ensure a prompt submission of your tax refund/offset.
We maintain the highest level of compliance for your R&D.

Can you give any tips on R&D or government grants?

Sure!

Ensure you regularly record all R&D activities, develop supporting documentation and have a system for managing throughout the financial year. Don’t leave it to the last minute!
Get scientific! Ensure you develop a strong hypothesis and make it clear what you are aiming to achieve in your experiments using specifics.
Prove yourself! Research that the product, method or development you are creating does not already exist in the market and if it does explain why or how yours is different and developing new knowledge.
When it comes to government grants ensure you answer the question and follow the assessment criteria to the tee. Be concise, do not write emotional responses and only include information about the company/project that is relevant to the grant you are applying for. Having an outsider review your work with an unbiased, non-emotional perspective can increase your chances of success tenfold.

If you have completed a grant application and simply need a review and honest feedback, we can also offer this service. Speak with one of our consultants to learn more.

How do I proceed from here if I wish to engage prmpt.'s services?

We love working with entrepreneurs, inventors, CEOs, CFOs and R&D managers who are passionate about their R&D project. Your success is our success, and we’ll always endeavour to achieve the best outcomes for our clients in an efficient manner, hence why we call ourselves prmpt, especially when it comes to R&D applications and securing R and D grants Australia.

To get started, take our eligibility test.