How many companies are missing out on tax offsets?

Smartcompany has written a post on the thousands of companies eligible for the R&D tax offset, but that don't currently use the program. This will be one of the big issues for the government as its Review of the National Innovation System gathers steam.

But, with 169 programs addressing "innovation" at some level in the Australian economy, the only surprise is that it's a program that's as big as the R&D tax offset that's unknown to companies.

Then again, maybe it's not.

Last August we spent considerable time travelling around the country with leading tax firm Hayes Knight as part of their Knowledgeshop Professional Network speaking with accountant members about exactly this issue. The fact is that many accountants are aware of the R&D tax offset program, it's just that many of them don't actually have any experience of it.

In a spectacularly unscientific study, what we've seen is that the breakdowns between clients and advisers fall into two categories:

1. Accountants who don't know how to talk to their clients about R&D; and
2. Companies who don't know how to talk to their accountants about their future plans.

Taken together these issues nearly always mean that companies miss out on the funding to which they are entitled...and accountants who are grateful that clients in Australia don't tend to sue if they find out that they should have been entitled to a cash benefit in one year but never did the paperwork.

I'm sure there will be many other insights that come out, but lack of program awareness has to be a big one...I'll write more on each of the failings in the coming weeks.