Thursday, August 13th, 2009 - Zakazukha
Innovative SME’s, who are typically involved in R&D or export development, are missing out on valuable government grants to help grow their business says respected accounting and advisory firm MPR Group.

Marc Peskett, partner of the Melbourne based firm says many SME’s are simply not aware of two key grants, the R&D tax concession and the export market development grant (EMDG), which may help them maximise their opportunities for future growth.

“The R&D Tax Concession, the Australian Government’s main incentive to increase industry’s research and development with a cash rebate, is a critical source of cash for many small innovative companies,” Mr Peskett says.

The concession enables companies to deduct up to 125% of eligible expenditure incurred on R&D activities from assessable income or in some cases 175%.

“There is also an opportunity for small businesses to convert their R&D expenditure into a cash rebate, if they meet the eligibility criteria.

“Companies who are undertaking eligible R&D activities should also consider taking advantage of the increase in the expenditure cap during 2009/10 from $1 million to $2 million.

“The increase is a transitional measure to extend the R&D tax concession cash rebate to a greater number of innovative companies before the proposed R&D tax credit comes into effect in 2010/11.

“Innovative companies have an opportunity this year to significantly increase their cash rebate particularly if they are coming into their fourth year of continuous R&D claims and are eligible for the 175 percent premium deduction before it’s abolished after 2009/10.”

Mr Peskett says for exporters, investigation of their eligibility to receive the EMDG, administered by Austrade, should be conducted now as they may be entitled to a grant of up to 50 percent of eligible export promotion expenditure over the $10,000 threshold.

The EMDG is also an important source of cash for small growing businesses to help fund international marketing activities.

“You’re eligible to apply for an EMDG if you’ve had annual income of not more than $50 million during the grant year and spent at least $10,000 on eligible export promotion activities during the grant year,” Mr Peskett says.

“If you’re a first time applicant, you may combine two consecutive financial years’ expenses in the first EMDG claim to meet the $10,000 threshold.

“Companies with international subsidiaries involved in export market development activity may also be eligible, however the Australian entity would have to pay for these expenses directly and show them as expenses in their financial statements, or the international subsidiary would have to invoice the Australian entity for the expenses.

“Regardless, if you are eligible you should start preparing now to lodge export market development grants before the 30 November lodgement date by collating expenditure records, trip reports and other relevant information.”

ENDS

Marc Peskett can be contacted for comment on 03 9869 5900.

For all media enquiries contact Bruce Nelson on 0423 403 449.

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Bruce Nelson

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W: www.zakazukha.com/

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Innovative SME’s, who are typically involved in R&D or export development, are missing out on valuable government grants to help grow their business says respected accounting and advisory firm MPR Group.

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