Innovation is at the heart of business growth, but turning new ideas into reality can be expensive and risky. To help Australian small businesses and start-ups push boundaries and scale faster, the government offers a dual-support system: the Research & Development (R&D) Tax Incentive and targeted grant programs such as the Industry Growth Program.
These two mechanisms work together to support different stages of the innovation journey, one rewarding experimentation, the other accelerating commercialisation.
The R&D Tax Incentive is the government’s flagship program to encourage innovation across all industries. It rewards companies undertaking eligible R&D by providing a tax offset, sometimes even as a cash refund for early-stage businesses operating at a loss.
For start-ups and SMEs, this can mean crucial, non-dilutive funding to reinvest in product development, hire staff, or extend your runway. Importantly, it’s entitlement-based: if you meet the eligibility criteria and document your activities correctly, the benefit is yours.
In simple terms, the R&D Tax Incentive helps you manage the risk of trying something new by sharing the cost of experimentation with the government.
While the R&D Tax Incentive helps with the “research” side of innovation, grant programs like the Industry Growth Program are designed to propel businesses closer to market.
These competitive, merit-based grants provide matched funding for projects that align with national priorities such as renewable energy, medical science, defence, and advanced manufacturing. They are particularly valuable for SMEs at the stage of scaling prototypes, entering markets, or building production capacity.
|
Grant Stream
|
Grant Amount
|
Your Co-Contribution (50%)
|
Minimum Project Costs
|
|---|---|---|---|
Example:
If your project costs $200,000, you could apply for a $100,000 grant and contribute $100,000 yourself. Larger projects (e.g., $10M total costs) can apply for bigger grants, up to the $5M cap, provided you can also fund your half.
Unlike the R&D Tax Incentive, grants are about future projects, and success depends on how well your business case aligns with government priorities and demonstrates commercial potential.
Both programs serve different, yet complementary purposes:
|
Feature
|
R&D Tax Incentive
|
Industry Growth Program
|
|---|---|---|
Many businesses benefit from both: R&D Tax Incentive to fund early experimentation and the Industry Growth Program to accelerate market entry. Just remember, the same costs can’t be claimed under both programs.
If you’re a start-up founder or SME owner investing in new products, processes, or technologies, there’s a good chance you could benefit from one or both of these programs. The key is understanding where your business sits in the innovation journey and choosing the right pathway (or combination) for your needs.
Want to look into this further? Reach out to us today to see how your business could tap into government support for innovation and growth.
Source: Tailored Accounts
Tax time can feel overwhelming, especially for small business owners trying to juggle operations, staffing, compliance and cash flow. But with the right preparation and guidance, lodging your tax return doesn’t have to be stressful.
Whether you’re lodging your return yourself or working with a tax professional, a little organisation now can make a big difference.
As we head into another round of tax season, the Australian Taxation Office (ATO) has outlined key areas it will be focusing on — and it’s a timely reminder to check your claims and records carefully.
Whether you work from home, have multiple income streams, or just want to make sure your return is accurate, this guide is here to help you navigate your personal tax return and stay on track this tax time.
Tax time doesn’t have to be overwhelming, especially when you have the right information and support at your fingertips. Whether you’re managing a home-based business or running a growing team, this checklist offers practical tips to help you stay on top of your obligations, avoid surprises, and maybe even find a few extra deductions along the way.
