Research and Development only for the big end of town?

This is not true.

The Research and Development (R&D) legislation has a differentiation for a company at $20M turnover. For companies with turnovers under $20M the R&D tax offset is calculated at 43% of the total R&D expenditure.

A tremendous benefit for companies with turnover less than $20M is the ‘cash payment’ that the ATO can pay to those companies. We will discuss how this works later this week.

According to AusIndustry, the expected amount of the tax offset in 2022/23 is $2.54B. This means that the actual R&D expenditure by companies with turnovers under $20M was $5.9B.

R&D is a very large spend for smaller companies and is definitely a very important consideration for any company that is undertaking the development of new products, services or processes.

Like everything in life, there are rules. We will talk about some of those rules later this week.