The research and development tax incentive (RDTI) application deadline is on 3rd May 2022, Tuesday, is fast approaching. This deadline has been amended from 30 April 2022 given it falls on a Saturday and the next business day is a public holiday in Queensland the Northern Territory. For companies with an income year ending on 30 June, the FY 2020–2021 claim must be lodged with AusIndustry before 10 months after tax year end to claim. Registrations after the deadline will not be accepted. Companies with their financial year end of 31st December will have till 31st October deadline.
To claim the R&D tax offset, you must:
- register the eligible activities for each income year you want to claim the offset with AusIndustry
- register within 10 months of the end of your company’s income year, and before you lodge the company income tax return in which you are claiming the offset
- access the R&D tax portal using MyGovID
From July 2021 all applications must be submitted using the new customer portal.
If you are seeking an extension you will still need to acccess the portal, therefore it CRITICAL that all business can access the portral using MyGovID.
Record Keeping for R&D tax
Why keep records?
If you don’t keep records of your R&D activities you are not eligible!
When applying to register for the R&D Tax Incentive, you must keep records that demonstrate your activities meet the eligibility criteria for the programme as defined in the legislation.
If your registration is selected for a review by the department, you may be asked to provide the contemporaneous records (records prepared at the time the R&D activities were being conducted) you used to self-assess your eligibility.
Maintaining good records can reduce your compliance costs and risks in the event that your registration is selected for a review.
Making sure you keep good records, along with having effective business systems and processes in place, will also help you comply with and receive the maximum benefit from the R&D Tax Incentive.
What type of records to keep?
The records you need to keep will vary depending on the nature of your business and the R&D activities you are conducting. If a company has no contemporaneous evidence that an activity has been conducted and met all of the eligibility criteria, then that activity is not eligible for the R&D Tax Incentive.
Examples of evidence you may use to demonstrate your eligibility under the programme include:
- design of experiments
- project planning documents
- project records and laboratory notebooks
- records of trial runs
- progress reports and minutes of project meetings
- test protocols, test results, analysis of test results and conclusions
- photographs and videos
- samples, prototypes, scrap and other artefacts
- records of resources allocated to the project (e.g., asset usage logs)
- staff time sheets
- tax invoices
If you are doing most of your R&D in Australia, but must do some of your R&D overseas because it can’t be done in Australia, you may be able to claim an offset for your overseas expenditure if you obtain an Overseas Finding.
An Overseas Finding is a finding by Innovation and Science Australia about whether the R&D activities you conduct outside Australia are eligible for expenditure claims.
An Overseas Finding application also automatically includes an Advance Finding application for the overseas activities, to determine if the activities are eligible activities for the R&D Tax Incentive. Overseas activities must have a significant scientific link to a core R&D activity conducted in Australia.
To get an Overseas Finding, you must submit an application before the end of the first income year in which you start the overseas R&D activities. Your application needs to include detailed information about:
- the R&D activities you have conducted in Australia which relate to the overseas activities
- the overseas R&D activities themselves
You must confirm the eligibility of all overseas R&D activities before you can claim the tax offset. You do this through receiving an Overseas Finding that confirms that each overseas R&D activity meets the eligibility conditions.
If you are unsure whether your company’s R&D activities are eligible for the R&D Tax Incentive, you can request an ‘Advance Finding’ by the department.
You must submit an application for an Advance Finding before the end of the first income year in which the activities were conducted. You can request Advance Findings for:
- activities you conduct in the current income year, whether you start or complete them in that year
- activities you propose to conduct in the subsequent two income years.
You will still need to submit an application to register your R&D activities after an Advance Finding. You do not need an Advance Finding in order to submit an application to register your activities. A positive Advance Finding gives you assurance that your registered R&D activities will be eligible for claiming under the R&D Tax incentive
New Registration Process
Application for R&D tax incentive must now be lodged online. View the walk-through customer portal video to help you in accessing the customer portal. Similarly, there are documents on guidance for applicants that you can download if you need more information about R&D tax.
Treadstone R&D Tax Ebook
Our free R&D Tax Incentive eBook will help you better understand this offset scheme for your eligible R&D activities. We have also included top tips from our senior consultants on how you can maximise your R&D tax offset.
Treadstone experts can help you understand government grants and maximise the benefits for your business. We have been helping clients since 2008 and our clients can testify to our proven success record. Working with us means you get the maximum grant with minimum risk and effort. Our expertise includes R&D Tax Incentive registration and tax schedules, Export Grants, Capital Expenditure and Infrastructure Grants.
Get in touch with us and let’s discuss this more in detail.
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