The financial services industry continues to advance and evolve over time, with the help of innovations to the management of secure data. Research and Development (R&D) that drives these innovations are supported by the Australian government with an offset of costs through the R&D Tax Incentive. From financial transaction software to service automation, if your company is involved in the advancement of technology or processes, you could be eligible for up to a 45% refund of R&D expenses.
R&D Tax Incentives for the finance industry
Financial services activities are usually centred around the strategic management and/or planning of funds, assets, securities, investments, insurances, and real estate. The digital age is revolutionising the financial services industry by changing the way consumers transact with financial institutions and service businesses.
Innovation in the financial services field helps to keep Australia at the forefront of technological change, supporting the local economy and benefitting consumers. It also helps to address challenges that the industry often faces with streamlining processes or delivering services.
The Australian government encourages financial services companies to innovate and tackle these challenges by providing a tax offset for research and development (R&D) expenses. If your business helps to improve processes or advance technology in this field, you could be eligible for the R&D Tax Incentive.
Examples of R&D activities in financial services
R&D activities in financial services usually relate to the management of secure data. As big chunks of sensitive financial data are being dealt with by the sector, the introduction of apps and online platforms help to simplify things in a safe and secure way.
Most of the R&D claims that we prepare in this sector relate to the development of modern tech for consumers e.g. Completing hassle-free transactions online or monitoring accounts in real-time to generate automated forecasts.
It's important to note for R&D to qualify for tax incentives, activities must generate new knowledge or unique solutions. The outcome of R&D activities can’t be known in advance – conclusions are determined by taking the risk to experiment and test ideas.
- Developing an automated loan application process using responses to assess credit risk in real time
- Developing a performance management system for the clean technology sector using live data to track energy generation and storage
- Developing a platform for equity based crowdfunding of technology startups
- Developing a personal finance application that can be synchronised with mobile banking and other financial platforms
- Developing an expenses tracker that allows both manual input of user costs and direct receipt scanning
Applying for the R&D Tax Incentive
For help in determining what expenses can be offset by the R&D Tax Incentive, it is best to consult a specialist. Our R&D specialists can assist with tailored advice for your circumstances and projects.
When developing new or improved software and web applications, these activities can be trickier to classify. Software development in particular comes with its own set of challenges, as the majority of coding for apps and platforms involves generic programming.
That said, if your business is completing testing and iteration to achieve a desired outcome, your activities might be considered eligible by the ATO and AusIndustry for the R&D Tax Incentive. You can find out more about R&D Tax Incentives in technology here.
Nifty R&D is here to support businesses just like yours, with a depth of experience in assessing, compiling and supporting R&D claims for the financial services industry. We review your eligibility at any time, with no upfront fees. If we find that your business is ineligible, we won’t charge you a cent.