Tax experts are concerned about the lack of information coming from the Government over the research and development tax concessions, saying there should be more details on the program given the start date is only a few months away.
This comes just weeks after experts told SmartCompany businesses need to get their information ready if they want to apply for a concession, as the requirements state detailed records on “core” and “supporting” R&D activities.
Institute of Chartered Accountants general manager of policy Yasser El-Ansary says there are concerns the Government has not introduced more information ahead of the July 1 starting date.
“While the Government may not be overly disappointed with the lower tax costs because of the pledge to return to surplus, small businesses have a right to feel ripped off.”
The Government intends to release details on guidelines and applications before the end of the financial year. But the new credit has now been legislated for nine months and there is still no more information.
While there are many businesses that welcome the new credit, which is eligible to businesses with turnover under $20 million, experts say the frustration is growing.
“At a higher level, the Government made so much of the fact this new regime was intended to redirect a lot of the benefit of the concessional support towards the smaller end of the market. That was one of the big selling points.”
“They were looking to provide SMEs with added support and reaching out to the small business community. But we’ve seen the delay of the introduction of the regime because of its complexities, and we have an issue where smaller, and even larger, businesses are not up-to-date with the workings of how this will all come about.”
Experts point out this is problematic given the complicated nature of the tax credit. Small businesses will need to explain what makes up “core” and “supporting” R&D, while firms will have to pass certain tests to be eligible.
With no information, businesses are left in the dark regarding how to proportion their budgets. There is also a continuing debate over the dominant purpose test contained in the new concession that has some manufacturing businesses up in arms.
“Businesses need information to help them through the guidelines with the new rules, but that detail has been lacking.”
“SMEs need information in a format they can digest and then apply.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
Comments