New changes to the research and development (R&D) tax incentive

Do you currently claim research and development (R&D) on your tax? If so, here are some changes to the R&D tax incentive that may affect your business, depending on your business’ aggregated annual turnover.

If your aggregated business turnover is $20 million or over

From 1 July 2018, the Government will introduce a new R&D premium for companies which provide higher rates of R&D support for higher R&D intensity.

If your aggregated business turnover is under $20 million

The R&D tax incentive will be capped at $4 million on cash refunds.

Amounts that are in excess of the cap will become a non-refundable tax offset and can be carried forward into future income years.

This means that for small businesses, there will be a reduction in the offset available and may impact your decision as a small business owner in undertaking and relying on the R&D tax incentive.


The ATO are cracking down on dodgy R&D claims.  In particular, they are closely watching businesses that abuse the incentive by claiming ordinary business costs as R&D expenses.

If you are worried about your R&D spend, speak to Burns Sieber to find out more.  And don’t forget to keep all your records and documents!