Research and development has an image problem. For a lot of people, when a conversation turns to R&D, we tend to think of people in lab coats and safety glasses, pouring blue liquid in beakers into test tubes full of bubbling pink stuff. But when you think of R&D, you should be thinking about money. Here's why.
The Australian Federal Government has a tax incentive which can see up to 43.5% of your expenditure reimbursed. Imagine buying a new house and getting almost half of what you spent back. That's some seriously good incentive.
This is known as the Research and Development Tax Incentive, and has been used by big businesses and laboratories alike to get massive returns on their tax every year. These organisations spend over $20,000 on activities related to R&D in a financial year and are incorporated under Australian law - that's pretty much all you need to be registered.
The big thing with any research and development is that it has to be creating new knowledge. R&D which isn't doing anything new isn't R&D at all. This could mean anything from designing and building a new type of bracket for a wall because conventional brackets just weren't good enough for what you needed, all the way to discovering the cure for cancer.
R&D Tax Incentive: An Opportunity Not Everyone Is Maximising
In 2015, only 13,600 companies registered for the R&D grant. This is pretty incredible considering there are over 2.6 million registered businesses in Australia. That's a tiny percentage actually claiming this grant, even though many businesses are probably doing R&D activities regularly.
One such company IGNITE Innovation had the pleasure of working with was a group of young inventors who saw a problem: recording and reporting an emergency as it happens, whether you're a victim or first responder. Their solution took hundreds of hours of prototyping, testing, and developing, all of which cost the business a great sum of money.
With the help of the R&D grant, they were able to recoup a fair sum of their costs; enough to be able to get out of the development phase and begin researching their domestic and international markets.
Some Examples of Business who Won the R&D Game
Another client had been working hard to grow a tea company. They were incredibly innovative with their processes involving tea blending and sampling, and their techniques to test brewing and shelf life quality were outstanding. In fact, these processes were so unique that they were worthy of the R&D grant, which let them access much needed cash flow and allowed them to develop new products for their brand.
These stories aren't uncommon, either. Many businesses we've worked with don't consider the work they are doing to be groundbreaking or revolutionary, but the knowledge they develop and new stuff they make are often all it takes to be eligible for one of these grants.
The Australian Government is still sticking to its 2016-17 "Idea's Boom", even if it hasn't been quite so loud about it recently. They still want businesses to drive innovation, and they want the R&D grant to help incentivise this at least part of the way.
The biggest failing of the Boom is that even though loads of people are doing really clever things all over the country, no-one seems to know about (or wants to access) the money which the government is trying to give away. And to us, that's a crying shame.
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