Claiming R&D Tax Incentive on Robotics

Robotics may be one of the most interesting fields in technology as we know it today. In science fiction and pop culture, images of R2-D2 and C3PO, Optimus Prime and Megatron may come to mind. In the real world, we have Sophia and Ameca, considered to be the most advanced humanoid robots we have in recent years.  It is interesting to know that sectors in this field is also eligible for R&D tax incentive.

R&D Tax Incentive

There are many applications of this interdisciplinary branch of computer science and engineering, such as social care and healthcare, which Sophia was originally intended to be built for. Hong Kong-based company Hanson Robotics created the robot, bearing in mind that she could be an old-age companion in nursing homes. Other applications include search and rescue, construction, agriculture, and space research, among many others. Though we have come a long way from the birth of modern robotics in the 1950s, we might still be in the early stages, as growth in this field is boundless. As advancements in artificial intelligence (AI) continue to sprout, our robots become more and more sophisticated in making decisions and require less and less human input. A lot of research and development (R&D) in this field also focuses on robots gaining human-like qualities such as empathy and social skills. 

There are age-old concerns with robotics about ethics as well as the possibility of displacing workers across industries. Due to this, lobbyists are calling for regulation in the field. But so far, the benefits outweigh these concerns, with safety being touted as one of the most important contributions it has—as machines replace humans in dangerous tasks. The most apparent help they do bring is an increase in productivity, efficiency, and quality in workflows. One thing for sure is that despite concerns, advancements will continue.

There are five primary areas of robotics, namely:

1. Operator interface – an interaction with operators; ability to communicate with humans
2. Mobility or locomotion – ability to move in various ways (e.g., walking or flying)
3. Manipulator and effectors – ability to manipulate or move items
4. Programming – the language used for communication between operators (humans) and robots
5. Sensing and perception – ability to use sensors to gather data from its surroundings

If your company is in the robotics industry and is undertaking activities in any of these areas of robotics,  claiming the R&D tax incentive would be a tremendous financial boost with tax credits and tax refunds on offer for eligible companies. Most work undertaken in this sector requires a tremendous amount of experimentation and the development of new solutions, which are usually the criteria AusIndustry looks for when assessing a project’s eligibility. 

It should be noted that project eligibility is based on two things: the ability to identify core and supporting activities. As per legislation, core activities are activities that follow a systematic progression of work: from encountering a technical problem to experimentation to the generation of logical conclusions. Supporting activities are any activities that were not experimental in nature but aided in the development of the core activities. 

Below are some examples of core activities related to robotics:

1. Creating a unique interface to allow operators to interact with a robot
2. Improving sensors in a robot to enable it to detect motions more precisely
3. Developing algorithms that will enhance the robot’s responses in certain scenarios
4. Designing a robot with enhanced complex movements
5. Injecting a more sophisticated data acquisition technique in the robot’s programming

Examples of supporting activities are listed below:

1. Conducting a literature review before conducting experiments to find out whether the knowledge to solve the technical problem exists
2. Assembling and training prototypes
3. Testing prototypes in multiple use cases
4. Testing algorithms
5. Routine hardware and/or software maintenance

We at Innercode can help you assess your eligibility for the R&D Tax Incentive scheme. We can also guide you to help you maintain contemporaneous documentation that will support your claim. Our company has years of experience delivering R&D tax incentive to mainly software and hardware companies– which include those that develop innovative robots. We have developed a streamlined methodology to make R&D tax incentive claim simpler for everyone, especially first-time claimants. Furthermore, we are always updated with the changes in the implementation of the R&D tax incentive scheme. Thus, we are positive that we can help you determine your eligible projects and activities, as well as the maximum amount of eligible expenditure that you can claim for your projects.

We have a set of eligibility checks you can take to help you assess your eligibility or you can contact us directly.

Further reading:

1. ‘Claiming IoT Project Activities’. Innercode, 31 Mar. 2021, https://innercode.com.au/innercode/claiming-iot-project-activities/.
2. ‘Claiming R&D for Hardware and Manufacturing’. Innercode, 12 Apr. 2021, https://innercode.com.au/innercode/claiming-rd-for-hardware-and-manufacturing/.
3. ‘Claiming R&D for a Tech Company’. Innercode, 8 Apr. 2021, https://innercode.com.au/innercode/claiming-rd-for-a-tech-company/.