With only a few weeks left until the end of the 2019FY, we are urging companies to spend all their necessary R&D expenses before its too late.
We often find that directors are not paying themselves a wage for their R&D work, or have not bought all the services or items required to undertake development in an effort to save costs and negate losses. From an R&D perspective, it is often better to be in a tax loss position, especially during their earlier years, as it not only ensures that you will be able to receive the full 43.5% tax offset back as a refund, but also indicates that the company is focusing its efforts in the research and development of their product.
Here are some things to keep in mind:
– If an individual owns more than 40% of the shares in the company, they must be paid through the company bank account in the financial year that they are seeking to claim;
– Any material costs prior to manufacturing can be claimed, including those scrapped during testing and development (provided they have the necessary supporting documentation);
– Overseas costs can generally not be claimed, so try and limit these costs where possible (unless the project requires access to a facility, expertise or equipment not available in Australia, and not simply because it is less expensive or because the overseas expertise, facilities, equipment, population or geographical or geological features are better than the Australian equivalent in which case an overseas finding must be submitted within the financial year that the applicant is seeking to claim);
If you have any questions or concerns, please contact us on [email protected] or on (02) 8861 9876.
