MPR's MedTech's Got Talent accelerator workshop slides, hosted by Simone Quinn
- 2. MPR Group • Business accounting and advisory for innovators – Accounting tax compliance – Director and board services – Capital raising – R&D and other grants – Start up services
- 3. • Will it employ staff? • Will it raise capital? • Will it list on the ASX? • Will you sell it and when? • How is the company owned? • Have you considered succession planning? What does the future of your business look like?
- 4. Obligations of companies • Company tax rate for entities with turnover under $10M is 28.5% • Requirement to register and manage GST withholding and reporting to the ATO (if income will be over $75,000 per year). Small business can report on a cash basis. • Completion and lodgment of annual company tax return. • Appointment of a company director.
- 5. Employing staff • Paying staff, payroll tax (if monthly salary of $47,916 or higher). • Superannuation withholding obligations for staff. • Opportunities to renumerate employees or investors with shares through ESOPs • Fringe benefits tax on non cash benefits provided to staff • Possible R&D tax incentive rebate on salaries
- 6. Seeking investors • Business angels vs venture capital • Sophisticated investors – no prospectus required for share issue • Follow on share issues need shareholder approval • Early stage innovation company – tax benefits for investors • Putting investors on the board
- 7. • Level of commercial opportunities available • Likelihood of litigation • Effects on possible grants (R&D and EMDG) • Trust structure to hold shares Separate IP company considerations
- 8. Cash management • Liquidity ratio – the assessment of the ability to pay debts as and when they become due • current assets/current liabilities • A ratio of less than 1 would indicate that the business is not in a position to pay its debts as and when they fall due and therefore technically insolvent
- 9. R&D tax incentive program Notional R&D deduction (No tax deduction for R&D expenses) Refundable tax offset @ 43.5% • Grouped annual turnover <$20m and • Tax exempt entities own <50% • If tax offset >Tax payable = cash Non-Refundable tax offset @ 38.5% • Grouped annual turnover >$20m OR • Tax exempt entities own >50% • Tax offset reduces tax payable • Unused tax offset carried forward
- 10. Eligible activities Core Activities • Experimental Activities • Core Activities tests – Outcome can not be known in advance (knowledge gap) – Experimental activities must be carried out using the scientific basis and method – Purpose of activity is to generate new knowledge (ie improved materials, products, devices, processes or services) • Example Core Activities – Software or prototype testing – Development of new algorithms
- 11. What is not a core activity? • Activities are not core R&D activities if a competent professional in the field is able to deduce in advance how to achieve the outcome, on the basis of current knowledge, information or experience. • Developing, modifying or customising computer software for the dominant purpose of use by any of the following entities for their internal administration (including the internal administration of their business functions): – the entity (the developer) for which the software is developed, modified or customised; – an entity connected with the developer; – an affiliate of the developer, or an entity of which the developer is an affiliate.
- 12. Expenditure related to eligible and registered R&D activities • Salary and wages, contractors, travel, overheads • Depreciation and balancing adjustments • Other costs that have direct nexus to R&D activities • Apportionment applied Eligible expenditure
- 13. Eligible activities Supporting Activities • Attending conferences for preliminary research • Researching methods to conduct experiments • Prior art searches • Activities monitoring and feedback • Project planning, management and administration • Documentation
- 14. Application process Tax year-end* *Standard tax year end is 30th June. Eligible R&D expenditure incurred
- 15. Export Market Development Grant • Encourages small and medium sized Australian businesses to develop export markets • Reimburses up to 50% of eligible export promotion expenses above $5,000 provided that the total expenses are at least $15,000 • Annual application process
- 16. Case Study
- 17. Level 19, HWT Tower 40 City Road, Southbank, Australia, 3006 Simone Quin – Director simoneq@mprgroup.com.au www.mprgroup.com.au 03-9869-5936