In this months contribution to Startup Daily, we talk about the R&D Tax Incentive with Scott Warnock from PwC. We have previously talked to Scott about eligibility for R&D tax incentives and how the incentive can benefit businesses around Australia.
We go through some of the key questions that businesses ask around the R&D tax incentive:
What is the R&D Tax Incentive opportunity?
The R&D Tax Incentive is the Australian Government’s key program to support R&D and innovation. It provides companies with up to 45 cents back for every eligible dollar, even in many cases where start-up companies are not yet paying tax.
Why should I lodge my application so soon after year end?
The benefits can provide much needed funding for startups. Most startups are pre-revenue and therefore eligible for a cash refund up to 45 cents for every eligible dollar. The sooner you lodge your application and the company income tax return, the sooner you receive the refund (and cash in the bank)!
What is the minimum amount I can claim?
The minimum expenditure to be eligible for an R&D Tax Incentive claim is $20,000. In PwC’s experience in working with a large number of startups, the base level of expenditure to ‘justify’ an R&D claim is approximately $50,000.
Get in touch with Scott Warnock from PwC here.
Startup Daily today interviewed Xero about how its customers use its accounting software. And Emma Petroulas from Nudge Accounting gave her views in the article on how accounting software, including Xero, can help startups and small businesses.
So what were some of the things that Emma had to say about Xero and accounting numbers for businesses:
- “The thing about numbers is that they don’t lie,” she says. “What we generally find with startups is that they tend to overstate the financial health of their business, but when they have their numbers in front of them it forces them to make some difficult decisions.”
- When a client knows their numbers, they can make the best decisions for their business. Nudge Accounting says that they use Xero to process clients’ numbers each month, which means that they have almost real time financials at their fingertips.
- Many of our small business clients have found it difficult to use Xero payroll,” she says.“Setting up payroll in Xero is easy when clients have staff who are on annual salaries, but when our clients have lots of casual staff working different shifts or irregular hours, they find it hard to navigate their way around the different payroll calendars.” In saying this, Petroulas says that they still use Xero and “love it”.
- This is a vital tool in the startup environment and could very well prove an early indicator for founders that things are going pear-shaped long before that ‘closing down’ sign rears its head. Based on the numbers in a management report, clients can recognise inefficiencies in their business and improve many parts of their operations process.
- “Using the tracking function in Xero, they have also been able to isolate and understand the most profitable product lines of their business, and change their strategic direction based on this,” adds Petroulas.