The Gillard Government’s research and development tax incentive could allow thousands of small businesses to innovate and boost business operations.
Australian Bureau of Statistics data shows 36 percent of businesses employing less than five people engaged in innovative action in 2009-10, as did 55 percent of businesses employing up to 20 people.
The tax incentive provides a targeted tax offset to encourage more businesses to undertake research and development. Minister for Small Business, Senator Nick Sherry says: “It makes sense for businesses to innovate. Those that do are twice as likely to boost their productivity and put on more staff.”
He also says they’re four times more likely to expand their product range and five times more likely to target export markets.
The incentive provides a 45 percent refundable tax offset for eligible business with aggregated turnover of up to $20 million per year and a non-refundable 40 percent offset to all others who are eligible.
Senator Sherry says: “The new incentive is better targeted, more generous and less complex than the tax concession it replaces. It effectively doubles the support for small firms to 15 cents in the dollar and increases support for all other firms by a third.”
The Australian Tax Office, along with AusIndustry are conducting information sessions nationally this month to ensure companies are aware of the support available under the incentive.