RSM is one of Robotics Australia Group’s foundation sponsors, keen to support companies in the robotics sector as part of their broader work supporting manufacturing in Australia. We spoke to Jessica Olivier, a Partner at RSM Australia in R&D Tax Incentives and Government Grants and National Leader – Manufacturing Services, to get an update on the R&D tax concession and grants.
As everyone in robotics knows, access to finance is tight and getting tighter. To help cashflow, you may want to consider other options of funding.
For robotics companies undertaking Research and Development (R&D) activities, the Federal Government’s primary means of support is the R&D Tax Incentive program. This is a broad-based, entitlement program which means if a company is performing eligible R&D activities, it’s entitled to make a claim.
The Cash Benefit
There are 2 levels of support available:
- For companies with turnover of <AU$20m, a refundable tax credit of up to 43.5c per $1 spent on eligible R&D; and
- For larger companies (AU$20m+ turnover), a non-refundable tax credit of between 8.5c and 16.5c per $1 spent on eligible R&D.
This means that for $300,000 spent on eligible R&D activities, there is a cash benefit of between $25,500 and $130,500 available to your company.
In Robotics, the types of R&D activities can range enormously from the development of new or improved products or processes, the implementation of new manufacturing processes and production lines or the development and trialling of new equipment (such as for Defence or Aerospace).
Timing is critical
Companies can access the R&D Tax Incentive annually. To do so, you must lodge an Application Form within 10 months of financial year end to register the eligible R&D activities.
For the 30 June 2022 year end, companies have until 30 April 2023 to lodge the R&D Application Form. The eligible costs are lodged via the Income Tax Return (which can be amended for the R&D claim if this has already been submitted).
In addition, once 30 June 2023 passes, the company can register and claim for this current income year also, so can potentially access R&D funding twice this year.
For those accessing large R&D refunds, there are R&D financiers who specialise in financing against the R&D refund in advance, i.e. as the money is being spent during the financial year and thus allowing you to access your cash earlier. If this advance is spent on more R&D activities, it automatically increases your potential R&D claim for that year as well.
There are many grant programs available for your business in relation to both manufacturing and production activities or site development. This might include factory expansion, attracting regional talent, building a new manufacturing facility, or solving challenges faced by the industry.
Both the Federal and State governments offer grant programs, so too are corporates and community organisations. For example, the Coles Nurture Fund aims to help Australian food and liquor producers innovate and grow and may be applicable to companies developing robots for Agriculture.
Other grants include the Export Market Development Grant (EMDG) which is administered by AusTrade to assist companies with export activities to take products into global markets.
The grants landscape is ever-changing. Grant opportunities can be open for specific rounds of funding or available continuously throughout the year. They can also be matched funding, which require your business to provide funds in addition to the grant award, or they can be one-off payments.
Be sure to speak to Dr Rebecca Barnes, RSM’s Grants Advisor (https://www.linkedin.com/in/rebecca-barnes/?originalSubdomain=auto) to find out what might be available to you.