MVP Ventures Program is offering grants of up to $200k for businesses ready to level up their technology

Attention NSW based tech innovators and disruptors! The MVP Ventures Program is offering grants of up to $200k for businesses ready to level up their technology. If you’re working on game-changing tech solutions and need funding to bring your vision to life, this is your chance to secure a piece of the pie.

The 1:1 matched funding grants will be awarded based on tech impact and viability, as well as business plan strength. Your project will be assessed on three criteria including innovation, commercialisation and deliverability. Examples of projects include prototyping and piloting studies, as well as the development of existing products through the implementation of new technology that will enhance competitive capabilities.

The Program targets new products, processes, or services within Technology Readiness Level (TRL) 3– 9 to help you move along the TRL scale and enable you to attract largescale private investment.

To be eligible, your business must:

  1. Be incorporated and have an Australian Business Number (ABN), or an Aboriginal and/or Torres Strait Islander Corporation
  2. Be non-tax exempt
  3. Have a physical HQ in NSW and demonstrate R&D as a core activity
  4. Hold IP or rights to commercialise your product
  5. Have an aggregated turnover of less than A$1 million in the three financial years prior to application
  6. Have 20 FTE or less.

To apply for funding from the NSW Government, you must provide the following documents, which our team of expert consultants can assist you in preparing:

– a pitch deck or video showcasing their product and explaining its uniqueness,
– evidence of financial turnover and number of full-time equivalent employees,
– proof of 50% matched funding,
– a letter from an eligible validating entity,
– a completed project template.

The NSW Government has committed to $10mil p.a in funding and applications are open now. Don’t miss out on up to $200k in funding – contact us at Noah Connect to help with your application and take the first step towards bringing your tech to market, before the 2022/23 pool is exhausted.

Grant Opportunity for NSW Waste and Recycling Projects

Remanufacture NSW has announced funding for Regional and Remote waste and recycling projects

The Recycling Modernisation Fund (RMF) is offering from $10,000 to $1 million in matched funding to cover the capital costs of projects that address infrastructure gaps in Australia’s waste management and resource recovery system.

The RMF focuses on the waste streams impacted by the Council of Australian Governments’ Export Waste Ban. Funding opportunities will support the NSW resource recovery sectors response to changes brought about by the decision to ban the export of unbeneficiated waste plastic, paper, glass and tyres.

Key Eligibility Criteria:

  • Projects must deliver/ trial new, or increase existing processing capacity, to address the processing of materials that fall under the export ban
  • Projects should seek to increase local employment and long-term economic growth and development in regional or remote locations
  • Projects should be completed by 30 June 2024 to meet the timeframes for phasing in of the waste export bans.
  • Projects should manage materials through:
  • new fixed or mobile facilities, or expansion of existing fixed or mobile facilities
  • new or upgraded equipment to increase local domestic processing capacity
  • increasing the use of recyclable/recycled materials in manufacturing and/or infrastructure

Examples of eligible projects include

  • Trials for the remanufacturing of plastic, glass and other material/s into building products
  • Advanced recycling of hard to recycle plastics, such as mixed, multilayer, flexible or contaminated plastics back into food grade recycled plastics
  • Installation of new equipment such as sorting lines, artificial intelligence (AI) or scanning technology, crushing, washing, shredding or pulping machinery
  • Community sorting stations or baling equipment

Here’s a link to some of the previous projects awarded funding through RMF.

Key Dates

Applications open: 8 November 2021

Applications close: 6 December 2021

If you would like to discover more about your eligibility for this grant opening, feel free to connect with the NOAH Connect team. Applying for a government grant is a complex, time consuming and highly competitive process; we’re experienced in assessing eligibility criteria and will ensure you put forward the strongest application possible.

Funding for International Collaboration

NOAH Connect secures Grant Funding for International Collaboration from Global Innovation Linkages Program for Client

Round 3 of the Global Innovation Linkages Program supports research and development projects that help to solve real world challenges and improve lives. Funding has recently been announced and we’re proud to say, our client is one of the successful applicants to have been awarded the grant, securing over $500,000 in Government Funding for their international collaboration to develop complementary preservatives for Australian meat products.

The Grant

The Global Innovation Linkages Program provides funding to help Australian businesses and researchers collaborate with global partners. The Department of industry, Science Energy and resources Program supports strategically focussed, leading-edge research and development. This Round of the Program was strategically focused on six areas: advanced manufacturing; food and agribusiness, medical technologies and pharmaceuticals, mining technology and equipment; energy resources and; cyber security. To be eligible for the grant, a company must collaborate with an University/ Research Organisation and a International commercial partner. 10 collaborative projects will share in $8.5 million in funding to bring together the best and brightest minds from home and abroad to drive innovation and find solutions to complex problems.

The Outcome

NOAH Connect was able to secure $525,000 in funding for our client to work with a Spanish food additives manufacturer and researchers at the University of Tasmania to develop complementary preservatives for Australian meat products. This is a great win for our client as most other grant recipients were led and awarded to universities/ research institutions.

If you would like to discover more about your eligibility for an upcoming grant opening, feel free to connect with the NOAH Connect team. Applying for a government grant is a complex, time consuming and highly competitive process; we’re experienced in assessing eligibility criteria and will ensure you put forward the strongest application possible.

 

Case Study: Modus wins Funding from Manufacturing Modernisation Fund

The successful grant applications for round 2 of the Manufacturing Modernisation Fund have recently been announced and we’re proud to say, our client, Modus, is one of the successful applicants to have been awarded the highest funding under the grant, securing a $1M grant.

The Grant

$55 million in federal government grants was available under round 2 of the Manufacturing Modernisation Fund (MMF) to support transformation in small and medium manufacturing businesses. 85 businesses shared in the grants this year which will help transform their manufacturing facilities and support job growth, enabling a highly skilled workforce. MMF aims to help Australian manufacturers scale-up, compete internationally and create jobs.

Our Client – M.O Brewing

M.O Brewing was founded by Jaz and Grant Wearin in 2014 with their first Brewery in Mona Vale on Sydney’s Northern Beaches. Only four short months after opening the brewery’s doors, they collected a staggering swag of accolades at the Craft Beer Industry Association’s (CBIA) national awards including trophy for Australia’s Best Amber/Dark Ale; trophy for Best IPA; then Campion Small Brewery; as well as Champion Australian Craft Beer. They are dedicated to brewing the best tasting beer around.

The Outcome

Noah Connect was able to secure $1,000,000 in funding for Modus’ expansion into Merewether, Newcastle with a focus on Brewing NORT, Modus’ new full flavoured non-alcoholic beer

“The NOAH team effortlessly guided us through the grant submission process and took on the brunt of the workload ensuring a competitive grant submission which ultimately resulted in a successful application” Grant Wearin – Founder Modus

If you would like to discover more about your eligibility for an upcoming grant opening, feel free to connect with the Noah Connect team. Applying for a government grant is a complex, time consuming and highly competitive process; we’re experienced in assessing eligibility criteria and will ensure you put forward the strongest application possible.

To find out more about Modus, connect with them on mobrewing.com.au

 

 

 

 

 

 

 

Case Study: First Focus Win Funding from Cyber Security Program

The successful grant applications for the Cyber Security Business Connect and Protect Program have recently been announced and we’re proud to say, our client, First Focus, is one of 14 applications to have received funding under the grant. 

The Grant

Up to 6.9 million in federal government grants was available under the Cyber Security Business Connect and Protect Program to support the cyber resilience of SMEs. 2.7 million of the grants went to IT companies, such as First Focus, to develop various cyber awareness and support training initiatives, particularly important in the wake of strong digital uptake during the COVID-19 Pandemic. 

first focus

Our Client – First Focus

First Focus is a dedicated Managed IT Service Provider (MSP) that specialises in combination enterprise-grade cloud technology and is a leader in the Australian, Philippines and New Zealand markets. 

The Outcome

Through certifying First Focus business advisory practices and particularly highlighting their ability to develop and deliver cyber security education packages to SME C-Suites, Noah Connect were able to secure $339,780 in funding for our client. Additionally, First Focus secured continued work through the grant to improve SME’s digital capabilities and uphold Australian business, economy and national security. 

“Maggie and the team at Noah Connect were instrumental in identifying our suitability for the grant, and helping us create and refine the grant submission.  Their ability to know exactly what it takes to make an application successful was highly valuable throughout the process.”

first focus
If you would like to discover more about your eligibility for an upcoming grant opening, feel free to connect with the Noah Connect team. Applying for a government grant is a complex, time consuming and highly competitive process; we’re experienced in assessing eligibility criteria and will ensure you put forward the strongest application possible.  

To find out more about First Focus and their IT services, connect with them on firstfocus.com.au

 

 

 

 

 

The RDTI Is Being Audited and You Can Have Your Say

Have your say on the effectiveness of the Research and Development Tax Incentive Scheme (RDTI) by writing in to the Australian National Audit Office (ANAO) here. Contributions are open for submission up until 31st May 2021.

The request for public contributions from the ANAO comes after unpopular changes to the RDTI were rolled back in October 2020, yet still, confusion remained over what software research was actually eligible under the scheme. 

Calls have been made for a whole separate software-focused RDTI scheme to be created, from tech leaders, who, in March 2021, signed an open letter to the ATO, proposing a collaborative workshop to help overcome a “lack of mutual understanding” over how the scheme works.  

What Will Be Audited?

The ANAO will be examining the Department of Industry, Science Energy and Resources, the ATO, and Innovation and Science Australia, and their running of the program.  

On the table for discussion is the effectiveness of:

  • assessment, compliance and assurance arrangements under the scheme
  • measurement and monitoring arrangements
  • planning for changes.

How To Have Your Say

If you’d like advice regarding the audit and making a contribution, please feel free to contact our NOAH Connect team for professional assistance. Or discover more about our services and the R&D Tax Incentive Scheme by reading our Case Studies

 

 

 

 

Round 2 Has Just Opened for the ‘Boosting Female Founders Initiative’ 

The Boosting Female Founders Initiative Round 2 has just opened up with a closing date of 22 April 2021! The Boosting Female Founders Initiative is just as it sounds – a grant initiative for female founders looking to scale their startups into domestic and global markets. So does your business qualify and, if yes, what’s involved in applying? Read below to see if you might be eligible and what could be available.  

Eligibility

First and foremost, to be eligible you must be: 

A female founded (majority owned and led by women) startup, that is:

A startup that is at least 51% owned and led by women (as per the Australian Business Register (ABR) and Australian Securities and Investments Commission (ASIC) and/or organisational records).

You must also hold an ABN and be one of the following entities:

  • Incorporated in Australia
  • A partnership 
  • A sole trader

female founder

Support 

Grants between $25,000 and $400,000 are available, with grants up to $480,000 available if you meet special eligibility criteria. Grants will be given on a co-contribution basis with the grant amount being up to 50% of eligible project costs. Also available through the initiative is expert mentoring and advice – a fantastic offering for any business owner looking to expand. 

Assessment Criteria

(This is where working with a trusted consultant can make all the difference to your application.)

Expression of Interest

You first must apply via an Expression of Interest (EOI) (found online at business.gov.au).

To be successful here, you must show how the grant will help your business expand into domestic and global markets, with an emphasis on how funding will remove barriers to your startup growth and how you are ready to take your product or service to market. 

Stage Two

If you are successful at the EOI stage, you will be invited to Stage Two where you must provide more detailed evidence of your capability, capacity and resources to scale your business. This includes producing polished documentation, such as:

  • evidence to support your source of funding
  • a pitch deck supporting your response to the assessment criteria
  • business financial documents 
  • a business plan
  • a trust deed (where applicable).

*Source: business.gov.au

women in business

How We Can Help

At Noah Connect, we can help you with both stages of the Boosting Female Founders application. As a female founded and run company, we’re passionate about helping other female founders achieve their dreams for business expansion. We’ve also had 17 years of experience helping companies through the initial steps of grant selection, to application review, business documentation and beyond. If you’re interested in applying for the Boosting Female Founders application before 22 April 2021, contact our expert team today 

 

 

 

 

 

 

 

 

 

Grant Applications Are Now Open for 1.3bn Modern Manufacturing Initiative

In October 2020, the Australian Government assigned 1.3 billion dollars of funding to the Modern Manufacturing Initiative to help unlock private sector investment across three targeted streams. Below we outline a brief explanation of the MMI and its different streams, as well as exciting grant opportunities now available under the initiative. Interested in more information about this opportunity? Get in touch with the Noah Connect team, to discuss your business’s eligibility today.

What is the Modern Manufacturing Initiative (MMI)?

Briefly, the MMI aims to help Australian manufacturers create jobs, scale-up, compete internationally by providing co‑investment through three targeted streams:

Funding Streams
  • Manufacturing Collaboration Stream (provides funding for very large projects that support business-to-business and business-to-research collaboration, to build economies of scale)
  • Manufacturing Translation Stream (helps manufacturers translate good ideas into commercial outcomes)
  • Manufacturing Integration Stream (helps manufacturers integrate into local and international supply chains and markets)
National Manufacturing Priorities 

All of these streams are designed for manufacturing projects that have broad sectoral benefits across six National Manufacturing Priorities, these include:

  1. Space – Currently open for applications. Applications close 22 March 2021 5PM AEDT
  2. Medical Products – Currently open for applications. Applications close 29 March 2021 5PM AEDT
  3. Resources Technology and Critical Minerals Processing – Currently open for applications. Applications close 1 April 2021 5PM AEDT
  4. Food and Beverage – Applications will open for this sector in the coming weeks.
  5. Recycling and Clean Energy – Applications will open for this sector in the coming weeks.
  6. Defence – Applications will open for this sector in the coming weeks.

Grant Opportunities

As you can see, the first round of MMI is already open, with space and medical products the first national manufacturing priorities to receive funding. Commonwealth funding can provide up to 50% of eligible project costs across all funding streams, with a minimum grant amount of $1 million and a maximum grant amount of $20 million. It’s expected that the average grant size will be about $4 million.

For the MMI’s ‘Translation and Integration Stream’, an initial combined total of approximately $140 million is available from 2020-21 to 2023-24 across all the National Manufacturing Priorities. Specifically, for the 2020-21 financial year – $40 million is available to support grant opportunities across all the National Manufacturing Priorities. It’s also anticipated that there will be $40 million in 2021-22, $40 million in 2022-23 and $20 million in 2023-24 available.

Conclusion:

As you can see grant opportunities abound in the coming years for manufacturers within the R&D sector, and the opportunities are starting now! If you’d like more information on the process of R&D grant applications, please check out our blog ‘6 Musts For Grant Success In 2021‘. Alternatively, get in touch with our NOAH team of dedicated experts, we’re ready to help unleash your potential.

 

 

 

 

 

 

 

 

 

 

 

 

 

Case Study: Robotic Systems

“We work with companies to turn their practical real-world experiences into profitable new machines”

Adam Amos, Director, Robotic Systems. 

The Industry

The uptake of automation is set to deliver Australia $2.2 trillion over the next 15 year as more and more companies begin to understand and explore the potential of robotics and intelligent autonomous systems.  

The Company

Robotic Systems creates end-to-end solutions, which combine custom electronics, software and hardware to solve some of the most challenging problems in mining and agriculture. 

The Australian company’s collaborative approach and practical development pathway accelerates the journey from ideas to manufactured products through an advanced prototype development cycle.

robotics systems lab

Image courtesy of Robotic Systems

Robotic System’s clear value proposition and success in solving difficult problems is reflected in the company’s diverse and expanding client base, which includes start-ups to billion-dollar companies, as well as advanced research organisations as repeat customers.

Examples of successful projects include:

  • Weed geolocation and spraying systems for broadacre agriculture
  • Underground wireless monitoring systems for mining
  • Airborne methane analysis systems for the CSIRO

mining truck

Image courtesy of Robotic Systems

R&D Tax Support

The R&D Tax Incentive program has been a key support for Robotic Systems and its clients. Robotic Systems takes an active role in the identification of projects that might encompass some eligible R&D activities, and putting in place the right documentation to support claims.   This includes experiment design, setup and testing methodology, proposed or viable outcomes and actual results, as well related expenditure such as hours and prototype costs. 

For companies that access R&D services through a Registered Research Provider (RSP), it can be a great way to collaborate and gain access to expert R&D resources, without having to invest in specialist staff or infrastructure. And, you can claim an R&D tax offset for eligible expenditure on registered R&D activities even if your total claim is less than the usual expenditure threshold of $20,000 in an income year.

NOAH’s Involvement

NOAH has been working with Robotic Systems for several years now. The Robotic Systems team had made one R&D tax claim themselves, however, Adam Amos, Director of Robotic Systems, was less than convinced that the program was worth pursuing again, given the amount of time and effort it had taken the team for a relatively modest benefit.    

Fortunately, Adam decided to give it another shot, this time with NOAH Connect managing the process. NOAH came on board and refreshed the teams understanding about the scope of the eligibility criteria, took over the technical drafting and updated the cost methodology. Further, NOAH helped Robotic Systems navigate the increasingly complex compliance environment and ensure a sound R&D claims framework was established.  Most importantly, this allowed the team to focus on building and strengthening their core business.

NOAH is proud to be partnered with Robotic Systems and assist them with R&D Tax Incentive claims. To find out more about them, visit them at roboticsystems.com.au or check out their videos, ‘The Robotic Systems Experience’ and ‘How Does Robotic Systems Work?’.

Get in touch with Robotic Systems if you need a practical, affordable and creative solution to an automation problem.  

 

 

 

 

 

 

 

 

A Breakdown of the Victorian Government’s Investment Into R&D, Tech & Startups

Last month’s Victorian State Budget is being celebrated as a ‘’game changing tech budget’’ on the back of a raft of new funding initiatives for start-ups and small business enterprises (SMEs). It is perhaps the breadth and depth of the funding that best evidences what the Victorian Treasurer, John Palls, has called the ‘’government’s optimism’’ in the role that startups and SMEs will play in Victoria’s post-Covid economic recovery. 

Here’s a breakdown of some of the more headline announcements.

R&D

The Vic Government has flagged a move into the R&D lending market by pledging $50 million for an R&D cash flow loans initiative.

Startups and SMEs claiming the federal government’s R&D Tax Incentive will be able to apply for low-interest loans from the State Government, covering up to 80% of their forecast refundable tax offset.

$2 Billion Breakthrough Victoria Fund

In one of the most significant investments any government has made in innovation for many years, the Vics have allocated $2 billion to a Breakthrough Victoria Fund. The funding is to be spent over 10 years and will be focused on supporting R&D in local businesses in sectors in which Victoria is already strong, namely life sciences, food and agriculture, manufacturing, clean energy and digital technologies.

LaunchVic Receives $40 Million Boost

LaunchVic is Victoria’s start-up agency. Its role is to grow the broader start-up ecosystem by investing in programs, projects and organisations that support startups and help them scale. In welcoming the additional funding, the Chair of LaunchVic, Leigh Jasper, said this multi million commitment was ‘’a vote of confidence in Victorian Startups’’ and recognition that ‘’startups are proven job multipliers’’. In this last respect, studies show that for every high skilled job a start-up creates, a further five jobs are generated in associated service sectors.  This is just one of the many spill over benefits of cultivating entrepreneurship.   

Two other funds established by LaunchVic – the Victorian Start-Up Capital Fund and the Women’s Angel Sidecar Fund – were also the beneficiaries of funding boosts.

Victorian Startup Capital Fund

The Victorian Startup Capital Fund will receive $60.5 million over three years to support early-stage startups. This will inject much needed early stage funding into the start-up and VC ecosystem and will go a long way towards ensuring promising start ups can scale and become the unicorns of the future.  

It’s expected that the government’s investment will be matched by private sector investors (e.g. high-net-worth individuals and super funds) which would mean that the fund’s size could well double within the next couple of years.

Women’s Angel Sidecar Fund

In exciting news, $10 million has been allocated to the new Women’s Angel Sidecar Fund which is dedicated to helping women-led startups gain more ready access to capital to grow and scale.. 

Again, it is expected that the private sector will match the funding, ultimately unlocking perhaps as much as $30 million in early stage funding, with up to $250,000 in co-investments on offer! 

Venture Growth Fund

Finally, the Vics have announced that they will invest $25.7 million to establish a new Venture Growth Fund. This is intended to be an anchor investment that will encourage the private sector to tip in additional funds. The aim is address the challenge startups face accessing capital but the focus here will be on low interest loans, for which so many startups have difficulty in gaining approval. It is likely to be well received by founders who will now not necessarily have to make the difficult decision to surrender equity to scale.

As you can see, a lot of trust is being placed in start-ups and SMEs to lead the Victorian economy out of the doldrums post Covid.  It’s especially pleasing to us to see the role that ‘’innovation’’ and ‘’R&D’’ can play in this journey finally being given due recognition. It’s fair to say that there has probably been no better time for  Victorian start-ups and/ or SMEs to think about making a grant application.  Suffice to say, we also think there is no adviser more expert than NOAH in terms of helping with the identification of likely grant opportunities and the subsequent preparation and management of the application.  Don’t just take our word for it- put us to the test and contact Noah Connect today. 

We provide online consultation, have a proven track record and make seamless processes our top priority. Interested to learn more about grant application processes? Read our blog 6 Musts For Grant Success In 2020

Update: Noah Connect Celebrates 17 Years In Business! 

Hip hip Hooray, Noah turns 17 and just like a fine whisky, we keep getting better with age. As we reached this milestone, we kicked off the celebrations with a team lunch right around the corner from one of Noah’s first offices in Darlinghurst. It was a great opportunity for the team to get together and reflect on how much Noah and the R&D tax program has grown and changed over the years. It was also lovely seeing everyone in person, given we’ve all been working from home during the pandemic.  

Part of this year’s celebration sees a changing of the guard. We farewell one of Noah Connect’s original founders, Nick, as he leaves Noah to explore other business opportunities. We also welcome Maggie back into the fold as Noah’s newest Director as we look to grow and expand the business. All in all, lots of celebrations and fond farewells as we move towards the latter end of a very challenging year. We’re looking forward to ending 2020 on a high note and steam rolling into 2021.  

fine whisky

Budget Boost for R&D Tax Incentive from July 2021

Along with many other stakeholders in the Start-up and Innovation Funding sector, NOAH was delighted to see the Morrison Government enhance the value of the R&D Tax Incentive program by committing to additional investment in its 2020 Budget over the forward estimates period. That is to say, that the Refundable R&D Tax Offset rate has been significantly increased and the Non-Refundable R&D Tax Offset benefit has, at the very least, been maintained.

In so doing, the Government has abandoned its controversial plan to cut $1.8B from the program in an acknowledgment that business investment in research and development will be a critical element in the post-COVID economic recovery. Such a view is obviously shared by the major parties because the legislation enacting the R&D tax boost was swiftly passed by Parliament last Friday without amendment.

The changes will take effect from 1 July 2021 and are expected to support more than 11,400 businesses both large and small.

Small businesses

For small companies turning over less than $20 million, the Refundable R&D Tax Offset will be increased to 18.5% above the claimant’s corporate tax rate, and the $4 million cap on annual cash refunds will not proceed.

Large businesses

For larger claimants turning over more than $20 million, the much maligned and complex R&D intensity test for the Non-Refundable R&D Tax Offset has been simplified by being reduced from three to two tiers. Moreover, the rates for these two tiers have been increased with an R&D intensity of 0–2% under Tier 1, which is now attracting an additional tax offset of 8.5% (which is on a par with the current non-refundable value proposition). Those companies that commit a greater proportion of their business expenditure to R&D — i.e. those characterised by R&D intensities in excess of 2% — will be far better-off under the changes by being entitled to a 16.5% tax offset on the increment of R&D expenditure above the 2% threshold.

Offset rates in FY22

In essence, the new reforms will decouple the R&D Tax Offset rate from the company tax rates, fixing the Refundable R&D Tax Offset rate at 18.5%, and the Non-Refundable R&D Tax Offset rate at 8.5% or 16.5% over the prevailing corporate tax rate (depending upon the claimant’s R&D intensity level).

The effect of this decoupling is that R&D tax claimants will no longer see incremental increases in their net R&D benefit arising from the falling of corporate tax rates. For example, the maximum tax benefit under the Refundable R&D Tax Offset will remain at 43.5 cents in the R&D dollar in FY22 when these changes first take effect. This 43.5 cent benefit being made up of the 25% corporate tax rate that will be applicable to base rate entities in that year plus the additional 18.5% Refundable R&D Tax Offset. This is but a minor consideration in the scheme of things and a small price to pay for greater certainty of investment in and quantifiable benefit for business investment in research and development.

We’ll be exploring the import of all other key changes in our upcoming blog posts including the introduction of a uniform clawback rule, as well as the proposed improvements to the administration, integration and transparency of the program.

2020-budget-boost-for-R&D-tax-incentives

Source: https://budget.gov.au/2020-21/content/factsheets/download/tax_fact-sheet.pdf

Don’t Wait, Apply for R&D Tax Incentive By 30th September 2020

From devastating bush fires to global pandemics, 2020 has already been a year that has severely impacted our regular everyday lives. It’s probably safe to say that R&D Tax Incentive claims probably haven’t been high on the agenda. The good news is that the Australian government has extended the deadline to apply for R&D Tax Incentive Claims for the period of 1st of July 2018 to 20 June 2019 (FY19) income year. The new deadline date is now the 30th September 2020 (previously 30th April). A fantastic result for anyone who may be experiencing a disruption or has simply been putting it off. 

Contact Noah Connect if you’re looking to meet this deadline and submit your R&D application. We’ll help you organise crucial aspects of your application, including:

  1. Assessing Eligibility Criteria

Applying for the R&D Tax Incentive is a complex process that’s highly nuanced. We’ll use our vast experience to determine whether your business activities are defined as “experimental” under the program, and help you demonstrate how your proposed idea addresses an R&D knowledge gap.  

  1. Getting financials and records in order

Every R&D Tax Incentive Claim requires comprehensive supporting documents to substantiate the activities registered and costs being claimed. We’re here to help you review and assess your records to assure compliance with the program. 

Now more than ever it’s important to take advantage of tax incentives available to you and your business. If you’re looking to apply before September 30 for FY19 or compile a claim for FY20, don’t wait. Contact an experienced team of professionals, who’ll support you throughout all stages of the application. Get in touch today, it’s worth the effort. 

Meet Up: Noah Connect Attends Latest State Reference Group

On 12th March 2020, Noah attended a State Reference Group (SRG), an industry event co-chaired by AusIndustry and the ATO, for which Noah is a foundation member and regular participant. 

The SRG is a stakeholder forum where the tax advisors meet to discuss insights on operational issues surrounding the R&D Tax Incentive. The feedback from the SRG is then used to inform national-level, Roundtable discussions regarding program administration. For a complete list of meeting minutes visit, business.gov.au/program-news-and-updates.

Here follows some key points discussed at the most recent SRG

Integrity Framework User Journey

Much of the discussion focused on an updated ‘Integrity Framework User Journey’ guide: 

detailed user journey guide

Source: https://www.business.gov.au/-/media/Grants-and-programs/RDTI/RDTI-Integrity-Framework–Detailed-user-journey.pdf 

The current User Journey Guide helps you to navigate the steps along your journey and possible issues you may experience, including if you are selected for a review. 

detailed user journey guide

Source: https://www.business.gov.au/-/media/Grants-and-programs/RDTI/RDTI-Integrity-Framework–The-framework.pdf

The updated User Journey Guide will place focus on education and guidance for registrants, as requested by the Department of Industry, Innovation and Science (DIIS). Particular emphasis will be placed on increasing face-to-face engagement with companies and transparency throughout the eligibility exam, which is encouraging to see.  

As the program is based on self-assessment this update is great news – particularly for first time registrants who need assistance navigating the program and understanding its requirements.  

A New R&D Registration Portal

Also coming down the pipeline is a new R&D registration portal. The new R&D registration portal will be web-based and assessed online. It will feature more plain English language and a simplified question structure aimed to guide businesses to provide information required. 

A Refreshed ‘Guide To Interpretation’

The ‘Guide To Interpretation’ is a fulsome document that sets out how AusIndustry interprets key elements of the definition of ‘R&D Activities’. The current guide issued in 2016 can be found here

However, now in discussion is an updated ‘Guide To Interpretation’ that will help assist companies of all sizes, across all sectors to understand and assess whether their work is eligible for the R&D Tax Incentive. 

Industry Statistics Discussed

Below is a list of some interesting claim stats we came across:

Statistic Detail
SMEs make up the vast majority of companies registering for the R&D Tax Incentive, but large companies tend to spend more Approximately 80% of registrants of the total 14,231 registrants are SMEs, compared to the 20% of registrants that are large businesses. However, large businesses account for 52% of R&D expenditure under the program
SMEs make up the vast majority of companies registering for the R&D Tax Incentive, but large companies tend to spend more
  • Services, Manufacturing and Mining are the top three sectors registering for the R&D Tax Incentive
  • These sectors account for nearly 92% of registrations
The top three fields of research account for 91.0% of all R&D expenditure Engineering is the highest at $4.5bn, then Information, Computing and Communication Sciences at $4.0bn and Medical & Health Services at $1.2bn
Professional, Scientific and Technical Services accounts for 44.2% of registrations in the Services Sector
New South Wales, Victoria and Queensland account for the majority of registrations

 

Summary

Overall, it’s fantastic to note the R&D Tax Incentive Roundtable is taking on our continued feedback regarding the need for transparency, clarity and engagement with applicants. An incredibly valuable program that drives economic growth and productivity, successful applicants can claim up to 43.5% refund for undertaking ‘R&D Activities’. It’s therefore vital that businesses understand the program and believe they can successfully claim through a supportive process. 

If you’d like help registering for the R&D Tax Incentive for R&D Activities carried out last financial year (1 July 2018 to 30 June 2019) the 30th April registration deadline is now extended to 30 September 2020. For professional, competent assistance on the claims process, contact the Noah Connect team.  

6 Musts For Grant Success In 2020

Australian Federal and State Governments offer more than 1,000 grants and funding programs each year targeting different sectors and different types of activities from ‘cleaner tech’ to ‘accelerating commercialisation’.  

While grants can be a game changer for your business the application process is often difficult and time consuming (to say the least). In this blog, we’ll discuss some government grants that might be of interest to you and outline six essential tips to help you succeed with your application in 2020. 

Common Federal Grants 

Below are three popular federal grants available. However, to find the grant or support program right for your business, answer four simple questions at business.gov.au’s ‘Grants & Programs’ page.

Accelerating Commercialisation Grant (AC Grant) 

Who it’s for: Australian businesses with a turnover of less than 20 million per year who have a novel product, process or service they want to commercialise.

What you get: Up to $250,000 matched project funding for Commercialisation Offices and Eligible Partner Entities; or up to $1 million for other applicants.

Export Marketing Development Grant (EMDG)

Who it’s for: Aspiring and current exporter businesses of small to medium size.

What you get: Reimbursement of up to 50% of eligible export promotion expenses above $10,000 provided that the total expenses are at least $20,000. Eligible applicants may apply for up to eight grants.

Manufacturing Modernisation Fund (MMF)

Who it’s for: Small to medium manufacturing enterprises that are investing in new manufacturing technologies and processes. The program supports technology and efficiency improvements as well as investment in more transformative technologies.   

What you get: Co-funding grants of between $50,000 and $1 million.

Six Steps To Grant Funding

Congratulations, you’ve researched and narrowed down your selections. Now follow these six steps to maximise the success of your application.

1. Identify A Grant Program That Matches Your Objectives

Every grant program has objectives that are tailored to a desired policy outcome. Once you’ve determined that your company or project meets the basic eligibility criteria, the next step is to ensure your project aligns with the program’s objectives.

Examine closely:

  • The strategic objectives of the department offering the grant e.g. the MMF grant is sector-specific and falls under the Advanced Manufacturing Growth Centre (AMGC). The AMGC’s Sector Competitiveness Plan outlines the government’s strategic priorities for the sector – does your project align with these? 
  • Program statistics and previous grant recipients – research publicly available data on the number of grants awarded per round, average grant size, grants per sector and more. This will give you a practical guide to the types of projects the program intends to fund and its competitiveness.

This research will allow you to define the project in a way that is most sympathetic to the program’s objectives. Successful applicants in any program must demonstrate that they offer best value for money for the taxpayer’s dollar – push to show how your business will create jobs, improve Australia’s competitiveness or upskill workers. 

You can discover the projects successfully funded under the AC Grant here.

2. Map Out The Cut Off Dates

Grants often have strict deadlines and long assessment processes. There may also be multiple stages to the application process. 

Map out the cut-off dates as best as possible before starting the application process to understand a birds eye approach to the progression required. The timeframes must be carefully managed with your business needs, as in most cases, project costs incurred prior to the grant agreement or contract being signed will not be funded.

3. Get Financials & Records In Order

On a similar note, review the mandatory attachments to the application such as a business plan, detailed budget, financial statements and market research report. Feedback on applications will generally only be provided where the application is complete and all attachments are included, at least in draft form.

If you are successful, keep in mind you will also need to report on project progress against agreed milestones as per the funding agreement. 

4. Examine the merit criteria and understand the relative weighting/score

Using the AC grant as an example, businesses will need to demonstrate ‘need for funding’ before other criteria will be assessed. It’s a fine balancing act to demonstrate this need for funding and at the same time showcase that your business has funding planned from other sources to meet its contribution. 

5. Create A Comprehensive Business Plan

Expect to spend time meeting with program delegates and revising your application based on their feedback. Have in place good business governance processes such as a comprehensive business plan, strong financial reports and detailed budgets. This will give your case managers confidence in your business. Use your business plan to show how you will implement the grant successfully in the future of your business. 

6. Seek Professional Advice

Applying for a government grant is a complex, time consuming and highly competitive process. Seek out a professional advisor for help in assessing eligibility criteria and to ensure you put forward the strongest application possible.  

Excited to explore your future business goals? For professional assistance, contact the Noah Connect team. We’ll support you from the initial steps of grant selection all the way through to funding and beyond. Discover more about our services over at our ‘Grant & Funding Programs’ page.

Small Business & Family Enterprise Ombudsman’s Review of the R&D Tax Incentive

The much anticipated Review into the R&D Tax Incentive (R&DTI) conducted by the Small Business & Family Enterprise Ombudsman, Kate Carnell, has now dropped and it’s fair to say that Ms Carnell hasn’t pulled any punches.

In short, the review found that the complaints of those small and family business taxpayers whose historic R&DTI claims had been subjected to review were well and truly justified. It was critical of the inordinate amount of time that was allowed to elapse between the R&D and the implementation of the compliance activity. It found that in most cases that the compliance activity itself was not only “untimely’’ but also “inconsistent and in many cases targeted’’. Moreover, the review identified that there had indeed been “an overall shift in the way the R&DTI legislation has been interpreted over the last three to four years’’ with “a narrowing of focus leading to a rejection of claims” which previously might have been regarded as “low risk’’.

The Ombudsman concluded that such an approach “undermined the policy intent of the R&DTI legislation” and seemed to be more about “recouping Government expenditure on the R&DTI”. It had not only created uncertainty but “has had a devastating impact on the companies” to such an extent that some now “face financial ruin”. Much more could be said about how compliance activities generally were found to be “reactive”, to “assume guilt” and to “lack the commercial understanding of how small businesses operate”.

In this last respect, we note that one of the recommendations made by the Ombudsman was that “[s]ubstantiation and record keeping requirements should reflect commercial practicality with Regulator personnel fully equipped to understand and collaborate with small business”.

All in all, we think the Review is a pretty damning assessment of the way in which the R&DTI compliance regime is currently being administered.

In the interests of balanced reporting, we should note that the Ombudsman did also examine the role played by R&D consultants. We have to admit that our patch did not escape criticism with the Ombudsman finding that there was evidence of some “mischief” in the R&DTI consulting sector. To be fair, though, this was identified as being largely confined to those unscrupulous operators (including some larger firms) who were aggressively marketing promises of cash tax refunds to businesses. NOAH agrees that such behaviour needs to be stamped out in order to prevent longstanding and well-respected R&DTI consultants from being tarred with the same brush. This is why we wholeheartedly endorse another of the Ombudsman’s recommendations that something akin to Austrade’s “Quality Incentive Program Consultant Register” be implemented in the R&DTI space. This would provide a level of surety to business that a particular R&DTI consultant is indeed properly accredited and has the expertise to offer professional and reliable advice.

The Ombudsman’s other recommendations seem equally well intentioned and sensible, namely that clearer guidance be drafted that is more attuned to small business and assurances given that any audit/ review activity take place as close as possible to the taxpayer’s first year of claim.

We can only hope that the Regulators take these recommendations on board when and if they revise their approach to R&DTI compliance. Reading between the lines, the Ombudsman seems to be quite optimistic that a change for the better might well be on the horizon. Let’s hope that such optimism is not misplaced because what is not in dispute is that the R&DTI can help stimulate Business Expenditure on R&D (BERD) which, in turn, has been linked to productivity growth.

R&D Tax Incentive Reforms Back on the Parliamentary Agenda

Just when we thought that the R&D tax reforms proposed by the Federal Coalition Government in its 2018 Budget were well and truly dead and buried they have been resurrected and reintroduced into Parliament – on the last sitting day of 2019 to boot!

You might recall that back in 2018 the Coalition proclaimed that the reforms were aimed at:

  1. improving the integrity of the system
  2. continuing the support of the start-up end of the R&D spectrum; and
  3. refocusing support for larger companies with greater rewards for companies undertaking higher-intensity R&D.

To the Coalition’s great frustration, a fractious Senate put these proposed reforms to the sword back in the day but it seems the government has kept them well and truly up its sleeve and in “original condition” for they have been reintroduced almost unchanged.

Clearly the government fancies its chances of getting them passed into law this time around but will nevertheless still have to prosecute its arguments when the Treasury Laws Amendment (Research and Development Tax Incentive) Bill 2019 gets debated upon Parliament’s resumption in February next year. Should the legislation pass it will apply to income years commencing on or after 1 July 2019.

To refresh everyone’s memory, here follows a comparison of how the proposed law differs to the current law:

R&D entities with aggregated turnover in excess of $20M

Current Law

Non-refundable R&D tax offset at a rate of 38.5%, equivalent to 8.5% effective tax saving.

Proposed Law

Non-Refundable R&D Tax Offset rate to be tiered depending upon the R&D entity’s “R&D intensity”. This “R&D intensity” is defined as the proportion of the R&D entity’s total business expenditure (as per Item 6 of the company income tax return) spent on eligible R&D expenditure in the income year (i.e. the R&D claim).

The tiers and the applicable Non-Refundable R&D Tax Offset rate are as follows:

Tier R&D intensity range   Intensity premium
1 R&D claim that is up to and equal to 4% of total company expenses 4.5%
2 R&D claim is between 4% – 9% of the total company expenses 8.5%
3 R&D claim is greater than 9% of the total company expenses 12.5%

 In what can be seen as somewhat of a concession, the Government has proposed that the $100M R&D expenditure cap be increased to $150M.

R&D entities with aggregated turnover less than $20M

Current Law

Refundable R&D Tax Offset rate at 43.5%.

Proposed Law

The Refundable R&D Tax Offset rate will be fixed at 13.5% over and above the corporate tax rate. The amount of any R&D tax refund will capped at $4M per annual (except for clinical trials).

Other changes:

There are some other changes that have been proposed in the Bill around claw back rules and balancing adjustments and the manner in which the program is being administered. We will tackle these at greater length in the upcoming blogs.

What Can We Say

As a long-standing adviser in R&D tax and a passionate advocate for a broad based and generous Government R&D incentive scheme for the nation, we are obviously disappointed to see the reforms reintroduced. In the context of a regulatory environment that is demonstrably and increasingly harsh, we fear these changes will only further discourage local R&D investment by introducing complexity (at the non-refundable end, where the benefit is marginal at best to begin with) and a measure of discrimination (at the refundable end with the carving out of clinical trials only from the $4M cap).

It is hard for us to see these changes as otherwise especially given the Government forecasts that they will deliver savings in excess of $4B to the budget bottom line.

“Incidental and ancillary” in the Context of Overseas based R&D Activities

Advance finding for overseas activities

Generally only R&D activities conducted in Australia will qualify for the R&D Tax Incentive. If certain conditions are met, however, companies can make claims for expenditure incurred on overseas activities where advance approval from government has been obtained. This concession is given in recognition of the fact that Australia does not always have all the necessary R&D expertise and facilities to meet R&D requirements and that research is increasingly global in nature.

To seek and obtain this advance approval, a company needs to lodge an overseas/advance finding application in the first income year that the overseas activities are to be conducted (i.e. in June 2020 at the latest for activities carried out during the standard July 2019 – June 2020 financial year). The approval of the application is contingent on the company’s ability to demonstrate that the following four (4) conditions have been met:

Condition 1

The overseas activity must be covered by an advance finding that the activity in question is an eligible R&D activity.

Condition 2

The overseas activity must have a significant scientific link to one or more core R&D activities conducted in Australia (Australian core activities). Those Australian core activities must be registered with Innovation Australia, or reasonably likely to be conducted and registered in the future.

Condition 3

The overseas activity cannot be conducted solely in Australia because:

    1. conducting it requires access to a facility, expertise or equipment not available in Australia;
    2. conducting it in Australia would contravene a law relating to quarantine;
    3. conducting it requires access to a population (of living things) not available in Australia; or
    4. conducting it requires access to a geographical or geological feature not available in Australia.

Condition 4

The total R&D costs (actual and reasonably anticipated) to be incurred in all income years do not exceed 50% of the total R&D project cost.

Can you claim overseas based R&D activities without an overseas or advance finding?

“Incidental and ancillary” expenditure does not require Innovation Australia’s approval.

The ATO will accept deductions of certain minor amounts of “incidental and ancillary” expenditure on overseas R&D activities without the need for companies to seek an overseas finding. In this respect, the overseas activities and the expenditure to be claimed in respect of them must be relatively insignificant in the context of the broader Australian based R&D activities and spend.

The Guidance from the Regulators suggests that this ‘’incidental and ancillary’’ exception could be relied upon where R&D staff are sent overseas to observe techniques and/ or trials or to attend seminars and conferences on subject matter that is relevant to the R&D project.

There is limited case law and/or rulings that can provide any insights into how the courts might otherwise interpret the meaning of the term ‘’incidental and ancillary’’.  Tax Ruling 2015/1 in considering what might be regarded as an ‘’incidental and ancillary’’ purpose states that:

“A purpose is incidental and ancillary…if it tends to assist or naturally goes with, the achievement of that purpose.”

Interestingly, the same Tax Ruling goes on to state that an ‘’incidental and ancillary’’ purpose should not be taken to ‘’mean a purpose that is minor in quantitative terms’’ (citing Navy Health Limited v. Federal Commissioner of Taxation (2007) 163 FCR 1; [2007] FCA 931 at paragraph 65).

There might therefore be some scope to consider that contributions that are somewhat more significant than attending an overseas trial or conference, could still legitimately be characterised as ‘’incidental and ancillary’’.

That being said, we must acknowledge that the application of the ‘’incidental and ancillary’’ allowance in respect of the expenditure incurred and claimed on the overseas R&D activities has always been predicated on sums that are absolutely ‘’minor in quantitative terms’’.

This interpretation dates back to when the exception was first enshrined in a Tax Ruling (IT2442, since withdrawn). While the Commissioner of Taxation has since continued the practice of accepting minor amounts of expenditure on overseas R&D activities in the absence of a finding, our experience and the published Guidance in this area gives us no reason to doubt that quantitative considerations would continue to be a determining factor in this regard.

If you’d like to know more about the eligibility of your overseas based R&D activities, please feel free to get in touch today.