Some business owners have grown leery of the PIC grant. Chalk that up to back-room “consultants” and their sometimes criminal advice, or to IRAS coming down on abusers like a kid in front of a whack-a-mole machine. Either way, it’s caused less obvious uses of the PIC grant to slip from notice.
What is the PIC Grant?
The Productivity and Innovation Credit (PIC) grant gives cash payouts, tax deductions, and more to local businesses. The idea is to encourage business owners to try new technologies, or to improve productivity through methods besides cheap labour.
You can read more about the PIC grant on the IRAS website.
Many businesses will tell you how to claim the grant (it effectively subsidizes their cost to you) , but here are some uses that seem to slip everyone’s mind –
Disclaimer: The following are broad categories. Always check with IRAS or a relevant specialist first. Do not make a purchase first, in the expectation of getting the grant.
1. Leasing, and not Just Buying, IT Stuff
Businesses that sell IT equipment (and software) will generally tell you to get a PIC grant when buying. But most, like their clients, are unaware that the PIC grant is not restricted to the purchase of IT equipment and software.
Check if the grant can cover the lease of your IT equipment, or the lease of your office system software.
2. Cloud Computing Services
Need cloud computing services? You can probably get a PIC grant for that. Take special note of this if the service provider is foreign – if they’re in France or something, they probably won’t know you can get a grant. It’s up to you to work that out.
3. Doing Up Your Website
This one causes some confusion, because the rules were changed.
If you applied for the PIC grant for web development between 2011 – 2013, you could get what’s basically a partial grant. You had to list a breakdown of all the things involved (e.g. all the programs used, the domain name registration, and so forth), and some of the items would be eligible.
From 2014 however, web development counts as automation equipment, and qualifies for PIC. Probably because someone in IRAS took a long look at local SMEs’ websites, and realized they were awesome only by the standards of a 1990’s Geocities page.
4. Registering Intellectual Property
Quite a few SMEs out there offer unique services to rival bigger companies (e.g. special training methods, secret recipe, new way to dye leather, etc.)
An alarming number of these haven’t bothered to patent these methods, because when you’re a start-up or SME the last thing you have a budget for is the equivalent of a thousand dollar flag saying “Me First”. When MoneySmart first started, we just sealed our business ideas in a jar and wrote threatening hexes on it.
Well the PIC’s here now, so approach the intellectual property office while the opportunity lasts. Your only real challenge will be the paperwork to patent something.
5. Buying Intellectual Property, or Acquiring the License to Use It
The flip side of the previous point. If you see a great idea that’s not being capitalized on, here’s your chance to try and do it. And you’d better do it now, because once the PIC ends your only alternative is to do it with all of your own money.
6. Certain In-House Training Courses
Most business owners know that staff training falls under the PIC. Fewer seem to realize that, for certain courses, the PIC can also be applied for in-house training.
So if you run a car services workshop, and you have an internal training program for employees (one that’s certified by, say, ITE). That might be eligible for the PIC as well.
(Also, note that you can get the PIC for the training of both local and foreign employees).
Do you use the PIC grant? Comment and tell us what for!
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