R&D Tax Incentive

A mix of limited time and lack of resources can often inhibit founders of startups and small businesses from getting around to implementing Research and Development (R&D) activities into their companies. However, when it comes to staying ahead or being the leader of an emerging industry, those who don’t create some sort of infrastructure when launching their business around constantly improving their product, platform or service offering can become the outdated industry player pretty quickly.

One of the easiest ways to create budgets for these types of activities within a company is by taking advantage of the R&D Tax Incentive, a tax offset for carrying out eligible R&D activities which is given in the form of a cash rebate.

It should also be noted that the R&D Tax Incentive is an entitlement, not a grant or prize program.


Any type of business, whether its a tech startup, retail store, or supermarket chain is able to take advantage of it.

It is important that the startup ecosystem in Australia begins to take advantage of the scheme; not only is it a great cash flow tool for a company, but doing so means that, as a founder, you get in the habit of driving an innovative culture within the office.

The fact is, it’s actually not difficult to submit an R&D return. When you use the Nifty Forms platform from PwC to go through the process, you go through a ‘wizard style’ set-up, meaning you actually don’t need to be super tech savvy either.

It should also be noted that recent political commentary around the scheme will probably have more impact at the enterprise end of town as opposed to the startup ecosystem. Talking about the potential review, manager at PwC Anna Perejma said that the government’s very public focus on startups and innovation will mean they won’t be looking at smaller sized businesses and startups for potential savings.

“I think what they’re really pushing towards, and it’s also similar to the New South Wales state budget that came out last year, is that the focus is now on that startup space and the government acknowledges that that’s where most of the opportunities lie to push forward great innovations, which quite often come from the small end of town,” said Perejma.

“In terms of the uncertainty of change, my opinion is they would be looking for some savings potentially with larger businesses using the scheme, like banks, for example.”

If there is a review, I hope that part of that is looking at how information about the R&D Tax Incentive is distributed to the market. As Perejma said, most of the time people don’t even realise that the activities they are conducting on a daily basis constitute as R&D.

“A lot of founders don’t necessarily understand or think what they’re doing is R&D,” said Perejma. “That’s very common, particularly in the IT space. A lot of IT companies develop all sorts of apps and smart ways of doing things and IT now makes up for a huge number of claimers, and that’s not a typical market segment that people identify as being R&D eligible.”

This post is powered by Nifty Forms. The new way to complete your R&D Tax Incentive claim, helping hundreds of Australian startups receive cash back from the government through the R&D Tax Incentive.

Startup Daily