I’m not sure about R&D. What does it involve?

The R&D Tax Incentive gives you a government funding benefit, which could include cash payments, for doing R&D. But if you’re not ‘an R&D company’, what does ‘doing R&D’ mean?

The R&D Tax Incentive describes R&D as being made up of core activities and supporting activities. Supporting activities are easy – they are anything that supports a core activity.

A core activity involves doing experiments. Don’t worry too much about what an experiment is, as that’s where we come in.

We will document your experiments correctly in your R&D plan.

Core activities must also be ‘for the purpose of generating new knowledge’ in the words of the legislation. This is a funny way of saying that you need to be trying to do something new that isn’t simply an obvious progression from what is already known.

You don’t need to succeed in doing something new. Even if your experiments fail you are still eligible. Also core activities don’t need to make sense in the context of your usual business. You can perform a core activity (carry out experiments) in any area and still be eligible.

Core activities can also be quite small, you don’t have to be a big player and anyone can be an 'R&D company' provided that you undertake core activities. You are eligible if you spend as little as $20k in a year on R&D.

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