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Update on Govt Funding Opportunities for Start-ups

In this special standalone Boardroom Briefing presentation Erik Anderson, RADBE Consulting, presented “Update on Government Funding Opportunities for Start-ups” at the Innovation Centre.

Introduction to RADBE Consulting
• One of the largest independent Grants consulting firms in QLD
• Four consultants with a combined experience of over 40 years
• Clients in QLD, NT, NSW, Vic and Tas
• Offices in Brisbane, Melbourne and SCIC

R&D Tax Concession
• Eligible R&D can be found where companies are creating new or improved materials, products, devices, processes or services
• Reimbursement basis – not a competitive process
• Retrospective application process
• R&D activities must contain ‘innovation’, or ‘high levels of technical risk’
• The activities can range from developing brand new technology to incremental improvements to existing products or processes. Direct costs of salaries & wages of staff working on R&D activities, e.g. CEO, Managing Directors, can be included in this calculation. Claim a percentage of the time invested by keeping evidence such as timesheets to reinforce your claim.
• Supporting activities may also be eligible – e.g. marketing activities, record the percentage of time invested.

The calculation is as follows:
Eligible R&D expenditure $100,000
Additional 25% deduction $  25,000
Total    $125,000

If profitable, tax reduction of $    7,500
If in loss, offset/cash amount      $  37,500

Commercialisation Australia
Announced as a replacement for
o Commercial Ready
o COMET
Budget of $196m over 4 years
Applications opened on 1 January 2010

Categories
Skills and knowledge (up to $50,000 for specialist advice and services)
Up to $200,000 to hire experienced executives
Proof of concept (grants of $50,000 to $250,000, to prove the commercial viability of the business model or idea for a product, process or service)
Early stage commercialisation (repayable grants of $250,000 to $2m, to develop the new product, process or service to the point where it can be taken to market)

Total of $9,673,678 has been awarded

 




Export Market Development Grant
2009/10
Budget $150m
Up to 8 applications
Max grant - $200,000
Min expenditure threshold - $10,000
Eligible IP expenditure – unlimited, e.g. taking patents in other countries.

2010/11
Budget $150m
Up to 7 applications
Max grant - $150,000
Min expenditure threshold - $20,000
Eligible IP expenditure - limited to $50,000

Must have a product that is ready for sale.

There is a possibility that the budget may be increased from $150m in 2010/11 to $200m

Categories
• Overseas representation – must be marketing activities of employees that are based overseas up to $200k in expenses.
• Marketing representatives – Australian based external third parties that offer marketing services – fees may be eligible.
• Marketing visits – Airfare and travel expenses to market your business in an international market. An allowance of $300 for travel and accommodation for a period of up to 21 days.
• Communication – 3% allowance on whole application, may not be worthwhile in many instances.
• Free samples
• Trade shows – costs of exhibiting at an international trade show or a percentage apportionment of the costs exhibiting at an Australian trade show (based on the percentage of international visitors to the trade show)
• Promotional literature and advertising
• Overseas buyers – bringing international clients to Australia to visit your company’s site (up to $45k in expenses)
• Intellectual property

Common mistakes
• Claiming sales to and expenses for New Zealand
• Claiming travel expenses for a spouse/close family member who doesn’t work in the business
• Claiming for trips that are not promotional or are not apportioned for non promotional travel
• Not principal in the transaction
• No apportionment for expenses of the overseas representative where OR also does other stuff
• Claiming expenses paid after 30 June/set off not documented
• Expenses not reflected in the AFS/correct AFS if group of companies
• Not understanding S94 implications – if you have owned a business that has already exceeded its 8 applications for the EMDG you can’t start a new business to make a new claim. If you have purchased a business that has already reached the 8 applications for the EMDG you cannot make any more claims for this business.
• Sales claimed by invoice not receipt
• Claiming commissions paid to Overseas Reps

Other Grant Programs
• Local
• State
• Federal

Understanding how you can make use of Government grant programs can make a big difference - evaluate if the reimbursements available are worth submitting an application.

For further information please contact Erik Anderson, RADBE Consulting, on erik@radbe.com.au or phone 07 3216 6242 or 0415 874 524.

www.radbe.com.au


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