Posted By: R&D SmartTax

Record-keeping for the R&D Tax Incentive has never been more important. Australia’s Federal Government is very careful to ensure that the money it hands out in this program goes towards genuine, substantiated activities and expenses. This means AusIndustry wants to see contemporaneous records of your experimental activities, and the ATO wants to see how you connect all of your claimed expenses to the experimental activities.

While it is true that companies wanting to receive the R&D Tax Incentive will have to undertake extra work to ensure their records are sufficient to satisfy both AusIndustry and the ATO, the good news is that help is available to make sure you get it right.

Firstly, know what the rules are and what is required. For this, our Substantiation Checklist is a handy tool that can help show what the goals are. The Substantiation Checklist is available with several other key record keeping tools in our R&D Template Package.

The next step is to review your records and check where improvements can be made. For example, do your invoices reference your R&D activities? If it is hard to make the connection between your supplier or contractor invoice and the activities that you have performed, then don’t expect the ATO to make the leap for you. Instead, advise your suppliers and contractors of what your expectations are for invoicing and reporting and make sure they follow through.

Finally, get a professional to help you. Here at R&D SmartTax we regularly help clients bring their record-keeping up to date with the requirements. This can mean that your resources can concentrate on the conduct of the R&D, while we help with the paperwork. Short, regular sessions to review records can make a big difference when it comes to audit time.

In the R&D tax world, it is not what you know, but what you can prove. And unless you can prove every statement and every cost that you claim for with solid record keeping, then it will not be claimable. But don’t panic, just follow our steps above, and your record keeping will be fine.


About R&DSmartTax

R&D SmartTax tools were born out of a desire to help the many smart small Australian companies access the R&D Tax Break benefits without the need for hours spent reading tax literature or expensive consultant fees. The R&D Eligibility Wizard is designed to be low cost, easy to use and available for all Australian industries.


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A. Blauensteiner
Australian Institute of Commercialisation

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