Get unlimited access. Save 70% when you subscribe today.

SmartCompany
Icon

Search

Create a free account, or log in

Federal Budget 2021

Startups

Tax

A quarterly cash injection? Senate committee recommends changes to R&D Tax Incentive payments

Recommendations from a senate committee on fintech and regtech could see R&D Tax Incentive payments dished out on a quarterly basis.
Stephanie Palmer-Derrien
Stephanie Palmer-Derrien
Icon

Share

temporary-full-expensing

The latest recommendations from a select committee on fintech and regtech could see R&D Tax Incentive (RDTI) payments dished out on a quarterly basis.

The Senate Select Committee on Financial Technology and Regulatory Technology, chaired by Senator Andrew Bragg, tabled its second interim report last week, making two recommendations relating to the contentious RDTI scheme.

First, it suggested that different assessment methodologies should be used for the scheme.

The report did not go into detail as to what alternative methodologies would entail, but referred to submissions that suggested the current means of assessment is not compatible with software engineering, and alternative methods could allow for more flexibility and adaptability.

“Consideration” should also be given to a separate, standalone RDTI scheme for software startups, it said.

Second, the committee advised that payments for successful applicants should be made on a quarterly basis, to help businesses with cashflow without increasing the overall cost of the scheme.

“This is a sensible measure that would provide important support to new startups,” the report said.

The recommendations come just over a week before the federal budget 2021, which could see the government taking on advice from the industry that has been submitted to the committee.

The RDTI scheme has been under scrutiny for years, with a suite of controversial proposed changes to the scheme rolled back in last year’s federal budget.

While a $4 million cap on refunds and a three-tiered system were scrapped, confusion remains over the eligibility of software-focused startups to secure refunds under the scheme.

Both former small business and family enterprise ombudsman Kate Carnell and StartupAus chief executive Alex McCauley have called for a new, completely separate software-specific RDTI scheme.

“The interpretation of what constitutes R&D in the act has started to narrow with the expansion of the cost of the scheme and the increase in the number of software claims,” McCauley said last month, speaking at a public hearing of the select committee.

That’s made it harder for software companies to claim the incentive, he added, suggesting that of all software claims that were audited, about half were rejected.

Many business owners “now feel that this backbone support policy … is slipping away from them”, he said.

Explore the series

Federal Budget 2021
  1. Morrison unveils $120 million deregulation package for business ahead of May budget
  2. The Morrison government has pledged $539 million to low-emissions tech — will any of it reach Aussie startups?
  3. Budget 2021: Low and middle income earners set to receive tax offset for another year
  4. Business groups call for changes to childcare subsidies and paid parental leave in the Federal Budget 2021
  5. COVID-19 relief, digital transformation and training: Here’s what SMEs want from the federal budget
  6. Budget 2021: Federal government is urged to prioritise women’s economy security and safety
  7. Frydenberg says the budget will spend big to boost the economy. Here’s what SMEs want to see
  8. These three economic facts point to big spending in the federal budget, economist says
  9. Budget 2021: Private higher education providers to get $53 million support package, as Frydenberg hints at cybersecurity focus
  10. “Unlikely to benefit”: Extra $1.7 billion for childcare will help some families, but won’t improve affordability for most
  11. ‘Don’t miss incentives’: How SMEs can understand the budget in one hour
  12. A quarterly cash injection? Senate committee recommends changes to R&D Tax Incentive payments
  13. Morrison government to splash small brewers and distillers with $225 million in excise tax relief
  14. Further insolvency reforms on the table, but government warned against “piecemeal” approach
  15. Australia’s budget is more about values than it is about money. Here’s what to look for
  16. Budget 2021: Depreciation allowances for intangible assets will be a boost to startups and SMEs
  17. “Open for business”: Video game industry welcomes 30% tax offset after eight years of lobbying
  18. From tech advice to tax overhaul: Here’s what the government’s $1.2 billion digital economy plan means for SMEs
  19. Josh Frydenberg made a lot of promises in last year’s budget. How did they work out?
  20. Budget 2021: How the small business ‘digital solution’ program works
  21. A lack of cybersecurity measures in the government’s digital strategy will leave SMEs vulnerable
  22. Digital economy plan will put VC tax concessions under review
  23. Soaring house prices or cutting down unemployment? What the RBA is choosing to value in the upcoming budget
  24. Tax offset announcement puts South Australia at the forefront to attract and foster video game developers
  25. Budget 2021: Here are 12 things we know will be included in the federal budget tomorrow
  26. Treasurer hints at changes to COVID-19 employment schemes, saying an extension to JobTrainer and end of JobMaker are on the table
  27. Startup Instaclustr partners with Uni of Canberra to fill tech skills gap, ahead of job-focused federal budget
  28. From changes to R&D to support for women: Here’s what we think the budget will include
  29. Here’s what SMEs want from tonight’s budget
  30. Federal budget to revamp employee share schemes for startups and emerging businesses in $500 million package
  31. Budget 2021: What are tech leaders looking out for?
  32. Small business ombudsman welcomes budget proposal for SMEs to pause debt recovery action in the AAT
  33. Budget 2021: Massive asset write-off and loss carry-back schemes extended for SMEs
  34. Budget 2021: Plenty for SMEs in big-spending, election budget bonanza
  35. Budget 2021: Government procurement for SMEs in focus
  36. Budget 2021: $500 million employee share scheme reform to help tech companies attract talent
  37. Budget 2021: New franchise disclosure registry to be established as Ombudsman’s office gets more funding
  38. Not one, but two elections: government’s cash splash is designed to keep Liberals in power for years to come
  39. Budget 2021: Skills in focus with JobTrainer extension and apprenticeships boost
  40. Superannuation guarantee: $450 monthly threshold scrapped in 2021 budget
  41. Budget 2021: No change to the RDTI, but some bright spots for startups
  42. Budget 2021: $206.4 million ‘patent box’ scheme to encourage medtech and biotech investment 
  43. Federal budget unpacks details of the government’s $124 million AI spend
  44. Budget 2021: $8 million for campaign to promote small and family-owned businesses
  45. Spend big, go low: Frydenberg’s big budget aims to drive unemployment down
  46. The winners and losers of last night’s federal budget
  47. Budget 2021: The government listened to women… but is it enough?
  48. Asset write-off explained: How your business can take advantage of the 12-month extension
  49. Budget 2021: What works for startups, and what doesn’t? Labor’s Ed Husic and tech leaders react
  50. ‘A 7.5 star budget’: Small business advocates welcome tax relief but say more is needed to help SMEs digitise
  51. In a bumper budget for small business and startups, here are eight policies that were missing
  52. No international travel until mid-2022? Here’s what the budget tells us about border closures and tourism
  53. Digital economy: The budget spend needs to be far bigger to stop Australia from “sliding down the rankings”
  54. Australian fashion industry receives $1 million budget boost to grow exports and create a new trademark
  55. From wage compliance to drafting contracts: Here’s how the budget’s $134.6 million deregulation package will help SMEs
  56. Budget 2021: What’s in it for women entrepreneurs? Not much
  57. Budget 2021: Everything you need to know about changes to superannuation
  58. Labor’s budget reply: Albanese promises loans for young entrepreneurs, green apprenticeships and IR reform
  59. Inaction on paid parental leave slows economic progress for women, research finds
  60. “I was expecting more”: Jo Burston discusses the so-called ‘budget for women’
  61. Industry expert says the patent box plan might see ‘more revenue lost than recouped’
  62. ‘A red tape buster’: Small business ombudsman backs the government’s streamlined licensing scheme for skilled trades workers
  63. Half of Australians think budget support for SMEs adequate
  64. The government’s approach to supporting women in leadership is ‘designed to fail’ says GoKindly founder Laura Conti

About the author

Stephanie Palmer-Derrien

Similar topics

Changes to R&D Tax incentive
changes to RDTI
r&d
r&d tax incentive
R&D tax incentive changes
R&D tax incentive startups
RDTI

Recommended for you