Here at Pherrus Financial Services, tax is our business, so naturally we always strive to stay completely up to date when it comes to any new developments in the financial world, especially with regard to the ATO (Australian Taxation Office). Since this can affect your personal finances, we’re also committed to sharing any relevant information with you, and giving our advice on how you can stay out of trouble with the authorities whilst maximising your revenue.
With two taxpayer alerts issued in February, the ATO has essentially warned those seeking to exploit the Research and Development Tax Incentive program, or not taking the necessary care with their claims. This R&D tax incentive was put in place as an encouragement for companies to engage in research and development; providing a tax offset for R&D activities deemed eligible. Many companies, though, have been improperly taking advantage of these measures, either unknowingly or otherwise, and this is what the alerts are intended to prevent.
In the ATO deputy commissioner Michael Cranston’s own words:
The alerts are designed to clarify what can and cannot be claimed, and help businesses to avoid mistakes such as ordinary business activities being self-assessed as R&D activities.
The ATO found that some businesses were “improperly applying for the tax incentive” when their activities didn’t “match with legislative requirements”. If you’re running a business, you might not be entirely sure whether you qualify or not. Time is money, as the saying goes, and it’s counterproductive to spend your precious time trying to figure this out, or dealing with the repercussions. Here at Pherrus we can assist you through the process, and allow you to spend your time more productively on other aspects of your business.
The terms of these taxpayer alerts can be studied in more detail here: TA 2017/2 and TA 2017/3. Essentially, the ATO felt that some businesses weren’t eligible because the activities they were trying to claim were “not sufficiently concerned with the generation of new knowledge” to be classified as R&D. Knowing what the ATO is concerned about makes it easier for us to help your business avoid these pitfalls.
Ultimately, in situations such as this it’s helpful to have a financial services company on your side, who can navigate these waters and ensure that you’re always operating well within the law, whilst still claiming money back wherever possible to maximise your bottom line. Luckily, here at Pherrus, we’ve got extensive experience and expertise guiding both individuals and businesses. We can easily guide you through this process, and prevent any pitfalls (such as applying for tax relief when it’s not warranted) so your financial dealings all go perfectly smoothly.
When you’re trying to stay on top of your tax, and get the best possible deal in the process, it’s important to work with a company who have the experience and the expertise in this field to ensure the optimum result every time for you or your business. Get in touch today to discuss this, or any other financial matters, with our friendly, knowledgeable team.