Aggregated Turnover

The rules for calculating aggregated turnover with regards to the R&DTI scheme threshold ($20m) are the same as those for the small business entity concessions. The aggregated turnover for an entity is the total of turnover of all connected entities. An entity is connected if it is controlled by the R&D entity or is controlled by the same third party.

So a Director of an R&D entity that also controls another business, would mean both those business must be included in an aggregated turnover calculation. If that Director is a Trustee of a Trust, the Trust must also be included.

The test is generally 40%. If ownership or control is less than 40% then there is no connection (note that Trustees are always deemed to control their trusts regardless of the number of other trustees).

For each entity, the annual turnover to be included is the total ordinary income derived in the financial year in the ordinary course of carrying on a business. So exclude any income that is not ordinary income.

In making the total, identify turnover generated in each entity, that is the result of payments from another entity in the calculation. Make a separate total of this because it is deducted from the total of the turnover calculation so that the aggregated turnover only represents income from third parties. However, when sending us these details do not deduct inter-company income from the disclosures, as this means that turnover comparisons made by the ATO may mismatch. The inter-company is recorded separately in the documentation.