The four things startups need to know to get cash from the government
Getting sufficient funding to get your business off the ground is one of the most significant challenges for startups – perhaps the hardest struggle an entrepreneur can face in the early days.
One of the most lucrative benefits is the federal government’s R&D Tax Incentive, a crucial source of funding for many startups. Unfortunately, many businesses find the claim process for R&D difficult to navigate and are unsure about what they can claim. Many are also worried about getting it wrong.
This is an unfortunate position given the huge benefits the R&D Tax Incentive can provide. Many commercial products have made it to market due to R&D tax incentives.
Our research indicates there are three times the number of small businesses in Australia who are eligible than actually claim the R&D tax incentive.
Many may be missing out purely because they think the application process is too burdensome.
Here are four things a startup should know in order to get the cash they’re entitled to – and get it fast:
1. Lots of product development activities are eligible. You don’t need to be a science lab to be eligible for the R&D Tax Incentive. Don’t discount yourself just because you think your activity may not be high-tech enough. You may be wrong.
2. You don’t need to have paid tax to get the incentive. Small businesses can receive the benefit in a cash payment.
3. You can still claim for the 2013-14 year – it isn’t too late.
4. The R&D Tax Incentive is not a grant. If you are eligible, you’ll receive a benefit – it’s not competitive funding.
Nifty R&D is a new tool developed by PwC, created in order to help small businesses access the R&D Tax Incentive with an easy to use, streamlined system. Claims are reviewed by PwC’s R&D specialists as part of the Nifty R&D process.
Nifty R&D allows users to complete their R&D Tax Incentive application form in under an hour and uses an automated process saving time and effort, whilst still maintaining an important customer benefit – the peace of mind of a PwC review.
Charmaine Chalmers is a partner, R&D Incentives at PricewaterhouseCoopers.