Recently, the Australian government acknowledged the importance of innovation by offering a new research and development tax incentive for innovative businesses, which allows business owners to claim up to 150% of their research and development expenses on their 2012 tax returns.
This can equate to hundreds of thousands of dollars finding its way back into your business.
Innovation is becoming ever more crucial in these challenging economic times, particularly when it comes to helping Australian businesses remain competitive internationally. With the strength of the Australian dollar, many businesses may find they are losing customers to cheaper international rivals. Finding new and creative ways to do business can help Australian businesses retain a competitive edge.
If you are not aware of the recent Government initiative, or have not been taking full advantage of it, your business might be missing out. The program gives eligible businesses the opportunity to claim a large percentage of research and development expenditure costs at tax time. The more money your business spends on research and development, the more you stand to gain from this new incentive.
Just working harder and longer hours is unlikely to generate substantial gains in terms of profit, but undertaking more research and development can have enormous benefits for your business in the long term. This program is not only designed to help businesses survive while developing new products, but is also aimed at encouraging businesses to constantly improve and to continue innovating, and therefore to boost productivity and the economy. Innovation allows Australian companies to be on the cutting edge of new technology and compete on a global scale.
Innovation, like most other aspects of running a business, requires organisation. Managing your research and development activities effectively means spending money in the areas that are most likely to pay back in terms of long-term gain. This may not necessarily be money spent researching and developing new products, it can also be money spent figuring out more efficient systems, and finding innovative ways to cut costs.
Determining which projects are worth pursuing, and which are unlikely to lead to any long-term gain, for your business can be one of the crucial elements of a well thought out innovation strategy. Understanding which will attract the 150% tax incentive is critical to evaluating the true cost / benefit of the different options you have to choose from.
It pays to make sure you are getting the best return on your R&D investment, and all the support you are eligible for to help your business meet the challenges and opportunities ahead.