Common Errors by R&D Tax Incentive Claimants

BSI Admin

The latest bulletin from AusIndustry provides insight as to the common mistakes made by claimants (20% of whom do not use an R&D tax incentive advisor):

  • Failing to understand the legislative and AusIndustry guidance.
  • Receiving advice from practitioners that are not registered with the Tax Practitioners’ Board, specialised nor experienced in the area of R&D tax incentives.
  • Receiving advice from practitioners that do not comply with the professional code of ethics.
  • Failing to identify specific R&D activities and failing to adequately describe the core and supporting activities e.g. the hypothesis should relate to a specific experimental activity and not a project as a whole.
  • Failing to identify the gap in technical knowledge that the experiment is seeking to bridge i.e. the gap in knowledge must be technical and cannot be merely economic and / or commercial. There must be uncertainty as to the technical outcome.

AusIndustry has also cited the following industries as higher risk in terms of lodging incorrect R&D tax incentive applications: mining and resources; software development; construction; and broad acre farming. Of particular concern is the practice of claiming “whole of project” whereby the whole project is not R&D. Companies must only claim eligible core and supporting R&D activities and exclude the activities within a broader project that are ineligible for the purposes of claiming the R&D tax incentive.

To view the full October 2015 edition of the R&D Tax Incentive Information Bulletin, please click here. If you would like to speak to one of our specialist, registered R&D tax incentive advisors then please call our directors Mick Lynch or Marcus Webb on 02 9126 9100.

We can ensure that your R&D tax incentive claim is correct in the first instance, saving you a lot of time, stress and money.