Today we were able to fully verify the ESIC status of a company.
While Joe average might have concluded the same it's taken 2 months, lengthy meetings, lawyers, accountants and the ATO to verify the in principal claim.
Yet with all that we are pleased. It's a result and the purchase proof that a bunch of investors have been waiting on, and that's the message.
Status confirmation isn't always quick or easy. It takes time.
Please don't make the mistake of confirming after you have investors ready to go.... chances are you'll lose some of them and or break something along the way.
Hopefully that's some milestones and not the bank,
Start verifying now, May and June will be awfully busy,
Tom
All about innovation
Get your status sorted
2017-11-21 13:04:24
Published By: Tom
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Ready to go Oslo?
2017-11-21 13:04:21
Having never visited the capital of Norway, the exotic and magical snow covered vistas form a backdrop to a very trick late night read. I am of course referring to the OECD Olso Manual.
Taking a deep dive into the manual, which is favoured and referenced by our legislators helps define all important tests for innovation. Take this extract regarding the tricky example of innovative services;
“innovations in services can include significant improvements in how they are provided (for
example, in terms of their efficiency or speed), the addition of new functions or characteristics
to existing services, or the introduction of entirely new services.”
Though services tend to be iterative and routinised, so conflicting perspectives could easily arise. Luckily the manual offers some guidance, conceding that;
'services tend to be continuous processes, consisting of a series of incremental changes in products and processes'
You may find that disrupted service type offerings are in fact ripe fruit for early stage innovation and indeed eligible for the tax concession all other things being equal.
Happy travels,
Tom
Published By: Tom
Are rulings in or out?
2017-11-21 13:04:18
We've been working hard to help early stage companies work on their taxation status, knowledge and qualification for the ESIC concession, and one area in particular has really started to gain momentum over the past few months. That's ATO Private Rulings.
Some argue that an ATO PR is a carrying the 'gold standard' as far as ESIC, however caution and skill is still required in obtaining one and or relying upon it.
Consider that ESIC status is 2 ways, firstly the company must be eligible, but also the investor. Failing by virtue of a close association with the startup, and or by acquisition or two many shares are just a couple of the trips that have caught correspondents to our service.
Thereafter you need to look at the ATO ruling in depth;
- A PR is only as good as the information provided (i.e. if the facts are wrong, the ruling will be invalid)
- the time the ruling applies (some only apply for a prior issue date of shares), others are limited to the 2016 tax year
- the time you will use the ruling (the clock is ticking through to the 30 June).
- subsequent events, e.g. a ruling based on the 2016-17 R&D spend
- a ruling or indeed any ESIC Status is no guarantee of an investment
- alternate qualification (many principals based rulings will be naturally superseded by points based qualification over time).
- disclosure by the company (all private rulings become 'depersonalised' public documents)
- subsequent audit of the investor (who is ultimately responsible for validating the ESIC claim)
Don't take it the wrong way, these are some of the considerations companies and investors need to look whist considering the best way to marry taxation and investment decisions regarding ESIC.
We really appreciate the work the ATO are doing in this area, so much so we are actively supporting a high % of the total ATO ruling output, which is great for us, as it means we have access the the biggest private tax law resource, outside of the ATO in the country.
So if you are considering applying for a ruling or using one, please feel free to drop us a line, we'd love to reconsider old ground, or crack open a new file.
Keep iterating,
Tom
NB: ATO INVESTOR MEMORANDUM ATTACHED
Some argue that an ATO PR is a carrying the 'gold standard' as far as ESIC, however caution and skill is still required in obtaining one and or relying upon it.
Consider that ESIC status is 2 ways, firstly the company must be eligible, but also the investor. Failing by virtue of a close association with the startup, and or by acquisition or two many shares are just a couple of the trips that have caught correspondents to our service.
Thereafter you need to look at the ATO ruling in depth;
- A PR is only as good as the information provided (i.e. if the facts are wrong, the ruling will be invalid)
- the time the ruling applies (some only apply for a prior issue date of shares), others are limited to the 2016 tax year
- the time you will use the ruling (the clock is ticking through to the 30 June).
- subsequent events, e.g. a ruling based on the 2016-17 R&D spend
- a ruling or indeed any ESIC Status is no guarantee of an investment
- alternate qualification (many principals based rulings will be naturally superseded by points based qualification over time).
- disclosure by the company (all private rulings become 'depersonalised' public documents)
- subsequent audit of the investor (who is ultimately responsible for validating the ESIC claim)
Don't take it the wrong way, these are some of the considerations companies and investors need to look whist considering the best way to marry taxation and investment decisions regarding ESIC.
We really appreciate the work the ATO are doing in this area, so much so we are actively supporting a high % of the total ATO ruling output, which is great for us, as it means we have access the the biggest private tax law resource, outside of the ATO in the country.
So if you are considering applying for a ruling or using one, please feel free to drop us a line, we'd love to reconsider old ground, or crack open a new file.
Keep iterating,
Tom
NB: ATO INVESTOR MEMORANDUM ATTACHED
Published By: Tom
Getting up to speed
2018-12-11 19:19:58
It's an old management adage, 'bring me up to speed on this', meaning let's get on the same page and get this done, so in that spirit I've attached our ESIC points table at a glance.
I hope it rev's your innovation engines,
Cheers,
Tom
Published By: Tom
Don't skip the commercials
2017-11-21 13:04:12
One of the first and often overlooked ESIC tests, 'is the company genuinely focused on developing for commercialisation'. Which seems pretty obvious, I mean who's going to invest in something that isn't?
Now I know that's probably not you, however we've already had listing request from social enterprise and co-ops so anything's possible right.
But more to the point.
It seems that the ATO are taking this idea a little more seriously. Consider the standard tech start-up building a market app. It should be an ESIC right, well all things considered yes.
Though the odd thing we read recently is that the ATO reckon the ESIC status will terminate when 'the system has been fully developed'.
I'm not sure if they understand web much, because most of us know that tech businesses never stop developing, however my assumption is that this isn't minor mods and maintenance they are referring to, it's launch of MVP and that's a newsflash and a somewhat weird reading of the law.
Luckily most start-ups will fail another test like revenue or expenditure before that, however you never know if this will become an issue.
My advise, keep innovating!
Tom
Published By: Tom