Fullstack Logo

R&D Tax Incentive Updates for FY2019 per the 2018-2019 Budget


What do recent budget proposals mean for the status of the R&D Tax Incentive in FY2019. Read on for our quick summary for the potential updates for the RDTI.

The recent budgets saw critical updates to how the R&D Tax incentive is addressed for larger entities and with less impact to startups who are often unprofitable in early years.

The changes outlined in the budget are expected to apply to R&D claims from 1 July 2018 assuming the bill becomes legislation.

Small businesses – Aggregated turnover under $20 million

Currently, small businesses are entitled to a refundable tax offset of 43.5% through the R&D Tax Incentive.

The changes proposed will align the benefit with the company’s tax rate for that year, with the refundable tax offset rate being the tax rate plus 13.5 percentage points. For many small businesses,
this will mean a refundable tax offset of 41%.

A $4 million annual cap on cash refunds will be introduced, with R&D expenditure on clinical trials being excluded from the cap. Any amount beyond the cap will be carried forward as a non-refundable tax offset.

While there is clearly a reduction in the benefit, the R&D tax incentive will still provide a generous tax offset for small businesses and startups.

Large businesses – Aggregated turnover over $20 million

Businesses with an aggregated turnover greater than $20 million will feel a greater impact from these changes.

Multiple rates of R&D tax offsets ranging from company tax rate + 4% to company tax rate + 12.5% will be available depending on the company’s R&D expenditure intensity.

The following table demonstrates the benefits in store should the proposed changes be implemented.

Aggregated TurnoverR&D IntensityCompany Tax Rate*Percentage PointsR&D Tax Offset
Under $20MN/A27.50%13.50%41%
$20M to <$50M
Above 10%
34% (Not including first 2% of total expenditure)
36.5% (Not including first 5% of total expenditure)
40% (Not including first 5% of total expenditure)
Above 10%
36.5% (Not including first 2% of total expenditure)
39% (Not including first 5% of total expenditure)
42.5% (Not including first 10% of total expenditure)

*Company Tax Rates used are based on the Enterprise Tax Plan Act.

If you have any queries around how the proposed changes could affect you, please reach out to our team for R&D Tax Incentive expertise.

Was this article helpful?


Stuart Reynolds
is the founder of Fullstack Advisory, an award-winning accounting firm for businesses leading the future. He is a 3rd generation accountant who specialises in tech companies, crypto and entrepreneurs.

Share this Article

Find out more.

Need accounting

Request a consultation and speak to one of our business accountants & advisors. Get clear next steps for your project.

Connect with us

Ask Us a Question?

Reach out to us about any of the topics in this article.

error: Content is protected !!

Via online meetings, email or phone, we are keen to help you get to the next level.

When it suits, just pop a time on the calendar.


Speak to our experts

Other ways to get in touch with us.

Your Privacy


We will never share your details with any third-party.

This form collects your name contact number and email address so that we can contact with you and provide a quote for our services. Please check our Privacy policy to see how we protect and manage your submitted data.



Suite 63, 388 George St, Sydney NSW 2000



120 Spencer St Melbourne VIC 3000



310 Edward St Brisbane QLD 4000

structures set Restructures

Structures - Setup & Restructures

  • Company Setups
  • Trust Setups
  • Flip Ups
  • Australian Subsidiary Setups
  • Detailed Tax Advice
  • Cap Tables
  • Equity Consulting
Get a quote Tax Advisory Icon
govt grants Incentives

Government Grants & Incentives

  • R&D Tax Incentive
  • R&D Finance consulting
  • Forward Financing consulting
  • ESIC
  • Export Market Develop. Grant (EMDG)
  • State Grant Editorial Reviews
Chat with an Advisor> Tax Advisory Icon
finance Forecasting

Financial Forecasting, Xero & Fintech Support

  • Dashboards
  • VCFO Reporting
  • Management Reports
  • Advisory Board Meetings
  • Bookkeeping & System Reviews
  • App Implementations
  • Cashflow Forecast Workshops
Get a quote structure and setup
complex tax questions

Complex Tax Questions

a) Book a consultation with a Tax Advisor
b) If more detail > Written Tax Advice

We regularly cover:
  • Corporate Structuring
  • International Tax
  • Restructures
  • Business Sales
  • Tax Consolidation
  • ESOPs
  • GST & Duties
  • FBT
  • ESIC
  • Tax Residency
Chat with an Advisor > Tax Advisory Icon
capital raising support

Capital Raising Support

  • Financial Modelling
  • Cap Table Modelling
  • Share Issues
  • Share Splits
  • Share Buy Backs Pre Diligence
  • Startup Valuations
  • ESIC / ESVCLP advice
Chat with an Advisor > Tax Advisory Icon
Tax Advisory Icon

Corporate Secretarial & Advisory Board

  • Share Issues
  • Share Transfers
  • Director Updates
  • Nominee Directors
  • Registered ASIC Agent
  • Monthly or Quarterly Advisory Board
  • AGMs
Get a Quote Corporate Secretarial