Startups looking for some certainty on the R&D Tax Incentive (RDTI) scheme for this year will have to wait just a little longer, as the Senate inquiry into changes to the program has delayed its report for a further two weeks.
The Senate Economic Legislation Committee was due to release its conclusions on the controversial changes to the RDTI scheme on April 30. In light of the COVID-19 crisis, however, that was pushed back to August 7.
Now, it’s been delayed again, with the report expected on August 24.
The proposed reforms would introduce a refund cap of $4 million, and create a tiered system for the incentive, calculating an ‘incremental intensity’ measure based on R&D expenditure as a percentage of total business expenses.
Originally unveiled in the 2018 budget, the changes have been controversial from the start, with critics saying they will curtail Aussie innovation, and even lead businesses to take their R&D offshore.
The inquiry received 93 submissions, including from the likes of StartupAus, FinTech Australia, the University of Melbourne and tech giant Cochlear.
This latest delay just draws out uncertainty for startups and other businesses hoping to claim the tax benefit — something that has historically been heralded as a boon for Aussie business.
In June, it was revealed that changes to the scheme would be implemented retrospectively, meaning businesses filing their RDTI claims in the time between the start of the 2020-21 financial year and the release of the inquiry report would have to revise their claims, and may have to make repayments.
On top of that, just last week it emerged that businesses accessing the RDTI may be forced to amend their income tax returns to omit wages that have come from the JobKeeper wage subsidy program.
At the beginning of the COVID-19 crisis, members of the startup community called for a back-peddle on the proposed changes.
A petition launched by entrepreneur and investor Adir Shiffman called for a six-month hiatus on the committee hearing, to allow the full effect of COVID-19 to be realised.
Shiffman also proposed early pay-outs of this year’s R&D claims, with a bit of extra cash on top as well.
“That’s effectively a survival payment, so that these companies don’t have to make workers redundant, and have some cash certainty,” he told SmartCompany at the time.