Australian businesses, particularly SMEs, can access literally hundreds of government grants that are offered by the Australian, State and Territory governments throughout the year.
Grants are available for businesses operating under various entity types including:
There are virtually no grants for businesses that are supplied on a 100% funding basis; in most cases funding for businesses is around 50%.
All business grants require a formal application to be submitted to a government department/organisation. Some applications require a large amount of material and can take a considerable time to prepare for example the Accelerating Commercialisation Grant application – but this is for a grant of up to $1,000,000 on a 50% funding basis. Most grants targeted at businesses require periodic and/or final reports to be submitted to the government department.
Some of the common types of grants for businesses include:
The applicant must be a company, have undertaken a documented research and development project and complied with record keeping and reporting requirements.
For companies with turnovers under $20,000,000:
In 2020/21 the Research and Development Tax Incentive Rebate is 43.5% of legitimate research and development expenditure that is claimed under this heading in the company’s income tax return.
In 2021/22 the Research and Development Tax Incentive Rebate is 18.5% above the company tax rate.
With the company tax rate for companies with turnovers under $20,000,000 being 25%, this means that the Research and Development Tax Incentive Rebate for these companies is 43.5%, the same as the amount for recent years.
A particular benefit that these companies have is that, if the company is trading at a loss, the directors can resolve to elect to receive a cash refund from the Australian Taxation Office as part of the company’s income tax return lodgement process of up to the value of the Research and Development Tax Incentive Rebate, subject to the company’s tax losses exceeding the rebate amount. The Australian Taxation Office normally pay this cash refund directly into the company’s nominated bank account within 30 days of the company lodging its income tax return.
If the company has a turnover in excess of $20,000,000 per annum.
In 2020/21 the Research and Development Tax Incentive Rebate is 38% of eligible research and development expenditure.
In 2021/22 there have been changes made in the calculation of the Research and Development Tax Incentive Rebate.
If the research and development expenditure, as a percentage of total expenditure for the company is up to 2%, the research and development premium will be 8.5% which is added to the applicable company rate to determine the Research and Development Tax Incentive Rebate.
If the research and development expenditure, as a percentage of total expenditure for the company is over 2%, the research and development premium will be 16.5% which is added to the applicable company rate to determine the Research and Development Tax Incentive Rebate.
Any type of entity can apply for this grant which is up to $1,000,000, on a 50% funding basis, subject to the applicant agreeing that, if they are nominated for a grant, they will incorporate a company which will be the grant recipient.
The applicant’s turnover must be under $20,000,000 for each of the last 3 years.
This grant is basically to fund “commercialisation activities” from the completion of the prototype which would normally be undertaken as part of research and development activities, until the company has completed its “first commercial sale”. The company must have developed a novel product, process or service that they wish to commercialise. The first commercial sale means that the company has received a payment with no specific discounts included because it is a new venture/product.
Whilst any type of business can apply for this grant, businesses that fall within the “growth sectors for the Entrepreneurs’ Program”, are treated as “preferred applicants”.
The growth sectors are:
In addition, businesses defined as “enabling technologies and sectors” that supply “enabling supporting technologies, imports or services to drive business growth for improved business competitiveness in one or more of the five growth sectors, can also be a “preferred applicant” for this grant.
The “Enabling Technologies and Sectors” are:
A grant supplied under the Entrepreneurs’ Program to SMEs to help build capacity, improve capability, extend networks and take advantage of growth opportunities in Australian or markets in other countries. Support is supplied for eligible businesses from 1 of 3 streams:
Grants of up to $20,000 are available for eligible businesses on a 50% funding basis. Examples of other grants that directors/leadership team members could review to determine their suitability for your business include:
Towers Business Development is an experienced business advisory services organisation, the Managing Director of which, Peter Towers, was a contracted Business Advisor to the very successful Commercialising Emerging Technology (COMET) Program that was delivered by AusIndustry and has now been replaced by the Accelerating Commercialisation Grant Program. Our associated business ESS BIZTOOLS and ESS BIZGRANTS have prepared detailed material on hundreds of SME grants available from governments in Australia.
We are presenting a free webinar: “Identifying Grants for Businesses” on Wednesday 11th August 2021 at 12-noon AEST. To register – click here.
To view these webinars/posts:
Towers Business Development does not give taxation advice but offers consulting services for small/medium sized enterprises and accountancy businesses, including:
Want to know more about the services that Towers Business Development can supply to assist your business in its business growth? You are invited to visit the Towers Business Development website; or contact Peter Towers:
Have a great day!