Merry Xmas
To all our clients and colleagues, as 2007 draws to a close, we trust that you will be taking a break and having a relaxing and happy Christmas with family and friends. Best wishes for the festive season and a safe and prosperous New Year.
Contents
- Research and development tax credits
- Emissions Trading Scheme (ETS) Update
- Festive advice
Research and development tax credits
The R&D tax credit regime will provide a welcome tax benefit for many businesses. The regime will apply from the 2008-09 income year (i.e. from 1 April 2008). To the extent businesses have a tax loss or are tax-exempt, the tax credit will be refunded in cash and will enable businesses to claim a tax credit of 15% of eligible R&D expenditure.
Many businesses may not be fully aware of the scope of the R&D regime and the type of expenditure that can qualify for the R&D tax credit. We believe many of our clients will benefit from this and you can download an outline of the regime here or access information from the IRD website here
The implications of this new regime should be worked through with your accountant or financial advisor. You will need to maximise your ability to identify and track qualifying R&D activities and expenditure and documentation will be critical.
CATALYST R&D can assist you to implement a staged approach to R&D identification and documentation.
This will involve two steps:
- Ensure your business has scoped all eligible R&D activities and corresponding levels of R&D expenditure.
- Embedding R&D documentation systems to ensure your business is able to track eligible activities and expenditure throughout the year
If you would like to discuss any aspect of this please contact either Jane or Malcolm.
Climate change and the Emissions Trading Scheme (ETS) – an update
Things are developing apace and for those with an interest in the agricultural sector the most significant development is the establishment of a MAF Technical Advisory Group (TAG) to… “act as the principal tool for engaging the sector on the technical design elements of the agriculture component of the NZETS.”
The TAG will have a number of roles key among them will be to:
Facilitate the delivery of a report outlining key technical considerations, possible resolutions, costings and recommendations for:
- A farm level point of obligation including farm level measurement of greenhouse gases;
- A processor level point of obligation;
- Any alternative option for point of obligation identified early in the process and agreed by the Chair and MAF as being worthy of detailed exploration;
- Method of allocation (ie. processor or farm level and the necessary detail)
- Accounting for mitigation behaviour on farm
- Work required for implementation
This report is to be delivered by 31 October 2008. These will be very significant decisions for the sector, made in a short time frame, and if you believe you will be affected we would encourage you to become informed and engage in the development process. Please contact us if you wish to discuss the implications of this next step.
If you are looking for more information on the ETS and what it may mean for you can go the Climate Change website here.
A contrary view on Kyoto
You may also be interested to follow the emerging international debate questioning Kyoto mechanisms. A recent commentary in the journal Nature, “Time to Ditch Kyoto”, argues that the creation of a global carbon market will only happen from the bottom up and if technology costs are reduced. It suggests that waiting for the market price signal to work through the innovation system will take too long, and instead call for major new investments in both technology and adaptation. It also calls for constructive debate to improve policies designed to combat climate change, without being considered a Kyoto “heretic”.
The commentary can be found at: http://www.nature.com/nature/journal/v449/n7165/full/449973a.html
If you want to discuss what this might all mean for your business please talk to us. We have undertaken inventories for businesses who are starting to consider these impacts in a quantitative way. You can download an outline of what this may involve here or get an overview of our services here.
Festive advice
To end the year on a different note ……
Last night, my wife and I were sitting in the living room and I said to her, "I never want to live in a vegetative state, dependent on some machine and fluids from a bottle. if that ever happens, just pull the plug."
She got up, unplugged the TV and then threw out my beer!
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