Elderton Group > Services > R&D Tax Incentive

Innovative companies play a key role in our economy, with research and development (R&D) investment made by businesses being a substantial driver of growth. Consequently, the government offers a generous tax incentive to accommodate and attract highly innovative companies to invest in the economy.

The research and development tax incentive is arguably Australia’s premium government business incentive for innovation. Unfortunately, many businesses in Australia simply aren’t aware of the significant cash flow benefit they could be adding to their business by making use of the tax incentive.

Elderton R&D are experienced in this field and we understand the intricacies of R&D tax incentives. Whether you already know you are eligible for the R&D tax incentive or need our experts to let you know whether you are eligible, we are well positioned to assist you. We can help you to understand the strategic value of R&D to your business, and help with writing and submitting all the required paperwork. We also help with all record keeping and management of any possible reviews.

About the Tax Incentive

The Tax Incentive offers a company whose revenue is below $20 million a 43.5 percent benefit on any of its research and development spend.

If the company is operating at a loss, the 43.5 percent benefit would be recoverable cash. As a simple example, if the organisation had $100,000 of research and development expenditure and was in a loss situation there would be a $43,500 cash injection through the tax incentive.

On the other hand, if the company reported a profit they would be entitled to an additional 15 percent tax benefit on the research and development spend. A very important point to note is that the incentive works on a financial year basis, meaning that a company can claim on their research and development expenditure for their past financial year’s operations.

It’s important to note the incentive is not only for technology companies. Any organisation that meets the definition of R & D according to AusIndustry may be eligible.

Business owners throughout Australia should be asking themselves the following question: “Are we doing something in our industry that is different from the competition and new in the market?” Some examples could be a beverage with a longer lasting shelf life, a new way of cleaning swimming pools, or perhaps a tool to assess the structural soundness of buildings. The list is endless. So, if you are innovating in your business category you may be eligible.

Set our below are some important points to note when considering a research and development tax incentive claim:

  • You should have valid reasoning for each and every figure being claimed. Don’t simply claim a standard percentage of all your deductions.
  • Understand clearly which staff were really involved in the innovation, don’t convince yourself that more or less work was done.
  • Don’t miss out on the smaller claimable items, they add up.
  • When articulating the innovation be articulate — you are selling it to government.
  • If this is a second year claim or onwards don’t simply copy and paste the previous year’s work. Find the new innovation that was done in that year.
  • Don’t miss the deadline, once missed that year’s claim has been lost.
  • Don’t assume you aren’t eligible; there is a good chance you are.

Already claiming the R&D Tax Incentive? Would you pass an audit?

If your company claims the R&D Tax Offset, it is critically important that you have the information and documentation to substantiate your R&D Tax claim.

Review our downloadable R&D Audit Checklist so you can ensure that you are prepared in the event of an audit.

How much could you get?

No Claim

38.5% R&D Tax Offset

43.5% R&D Tax Offset

Assessable Income




Deduction/ R&D Spend




Deductions Claimed/ Forfeited


Taxable Income




Gross Tax (27.5%)




R&D Tax Credit



Net Tax Payable




Benefit yield of R&D Spend



To find out if your business is eligible and how much you could be entitled to, contact our team of professionals today.

R&D Tax Incentive Claim Preparation

The preparation of an R&D Tax Incentive claim involves:

  • Collation and analysis of technical information;
  • Preparation of formal government documents and additional technical documentation;
  • Application of detailed accounting methodologies; and
  • Application of the R&D tax legislation and AusIndustry and ATO administrative processes.

Elderton R&D are experienced in preparing successful R&D Tax Incentive claims. We are able to assist in all aspects of the R&D tax incentive claim preparation process including:

  • Identification of eligible R&D activities to be included in the claim
  • Technical scoping of these projects
  • Preparation/updating of R&D substantiation documentation
  • Collation of eligible R&D expenditure for inclusion within R&D Tax Schedule and R&D Applications
  • Preparation and lodgement of the Application for Registration of R&D Activities
  • Calculation of the 38.5% non-refundable/43.5% refundable Tax Offset attributable to the R&D activities
  • Preparation and finalisation of the R&D Tax Schedule
  • Provision of a claim summary letter
  • Advice relating to an AusIndustry review or ATO audit.