Australian State and Federal Governments currently provide a range of tax incentives and grants to businesses aimed at supporting research, innovation and export. Most are for startups and new technologies but established SMEs in other industries may qualify in some cases. A grant can often help with the task of managing cash flow while growing your business.
Whether you are eligible for a government grant depends on a number of factors including the size and nature of your business, your financial position, staff numbers and geographic location.
As a starting point, here is a quick guide to the various options available. Please contact me if you have questions about these incentives or would like our help with your application.
Research & Development (R&D) Tax Incentive FEDERAL
Lodged as part of a company’s income tax return, this is a tax offset based on the company’s R&D activities during the year.
- Companies with aggregate turnover below $20m could be eligible for a 43.5% refundable tax offset on R&D expenses.
- Companies with aggregate turnover of $20m or more could be eligible for a 38.5% non-refundable tax offset on R&D expenses.
Accru Felsers works closely with R&D specialists to assess companies’ eligibility and to submit their claims as part of the income tax return. See R&D specialist Noah R&D Tax Checklist to find out how the process works and contact us if you’d like to know more.
Early Stage Innovation Companies (ESIC) Tax Incentive FEDERAL
This is an incentive provided to investors in Early Stage Innovation Companies designed to make startups more attractive to angel investors for capital raising. Eligible investors will receive:
- A non-refundable carry-forward tax offset equal to 20% of their investment (up to $200k); and
- No capital gain (or losses) on the disposal of the shares if held between 12 months and 10 years.
There are multiple eligibility requirements around the company and the investors, including a points system. There are also specific reporting duties for the company in regard to the investors.
See our article Tax Incentives for Early State Investors for more information and contact us if you would like us to assess your eligibility, provide assurances to potential investors or help you to claim the incentives from the ATO.
Accelerating Commercialisation FEDERAL
This grant is aimed at helping businesses commercialise their products, processes and services. It provides:
- Access to a network of expert advisors
- Matched funding for 50% of commercialisation expenses, up to $1m.
Applicants must have a combined turnover under $20m for the previous three years and meet criteria on market opportunity, value proposition, management capability, execution plan and national benefit.
Innovation Connections CSIRO FEDERAL
Supported by the Government, CSIRO offers grants up to $50k to help support businesses (turnover between $1.5m and $100m) conduct research where there is either:
- Engagement of a publicly-funded research organisation to undertake research activities
- Placement of a researcher in the business to develop and implement a new idea with commercial potential
- Access to research infrastructure; or
- Access to other forms of research capability (needs assessment).
The Export Market Development Grant (EDMG) FEDERAL
Administered by Austrade, this program aims to encourage Australian SME businesses to develop overseas markets.
For the first two years, it will reimburse up to 50% of eligible export promotion expenses your business incurs on the portion of expenses above $5,000. From the third year of receiving grants onwards, the business must satisfy certain other requirements for which Accru can help assess you.
The scheme can provide up to eight grants to each eligible applicant for various marketing costs up to a maximum of $150,000. See our Export Market Development Grant article for exactly what costs can be claimed and the maximum limits.
Minimum Viable Product (MVP) Grant NSW
This grant is for businesses at pre-revenue stage which have completed a proof of concept. It provides funding for 50% of approved project costs, up to $25,000.You can find out more about this grant in our Minimum Viable Product Fact Sheet.
Building Partnerships Grants NSW
This grant is aimed at developers of new technology that classify either as established small businesses (<$500k turnover) or members of an incubator/accelerator program. It provides funding for 35% of approved project costs, up to $100,000.
Loan Support NSW
The NSW Government offers the following incentives:
- Accelerating Growth Loans – a $200k-$500k loan with 9.2% interest, in exchange for a commitment to create 10 new Full-Time-Equivalent jobs in NSW within 2 years.
- Strategic Growth Loans – $500k-$1.2m loan with 9.2% interest, in exchange for a commitment to create 20 new Full-Time-Equivalent jobs in NSW within 3 years.
- Loan Guarantees – a guarantee for up to 50% on a loan, in exchange for a commitment to create 30 new Full-Time-Equivalent jobs in NSW within 3 years.
Small Business Grant NSW
Employers who create a new full time employment position are entitled to a grant of $2,000 provided the employee stays with their business for 12 months or more. To qualify, the business must be under payroll tax threshold ($750K wages) and must lodge their claim within 60 days of the 12 month anniversary of the new employee. See more detail in the Government’s Small Business Grant Fact Sheet.
Over the past five years Accru Felsers and our specialist partners have assisted clients to access millions of dollars in grants in sectors such as fintech, renewable energy and high-tech manufacturing. If you have questions about these incentives or would like our help with your application, please don’t hesitate to get in touch.