R&D Tax Offset cut by 1.5%

14 October 2016

On 15 September the Budget Savings (Omnibus) Bill 2016 passed both Houses of Parliament and received Royal Assent the following day. Included in the Bill was a 1.5% cut to the R&D Tax Offset. This means that the rate of the R&D Tax Credit is reduced from 45% to 43.5% for companies with less than $20 million turnover and from 40% to 38.5% for all other claimants, for tax years starting after 30 June 2016.

Whilst this cut is disappointing for the companies that are eligible to claim the R&D Tax Incentive, the changes received bipartisan support, and ends a significant amount of uncertainty that has been associated with these cuts for quite some time, as we highlighted earlier this year

These changes will significantly impact those businesses that have borrowed money against their future expected R&D Tax Credits, as well as those that have factored it into financing their research projects.

If you would like to understand how these changes affect your company’s situation, please contact one of our R&D Tax experts.