Posted By: R&D SmartTax

If ever there was an exercise in patience, working with Australia’s New R&D Tax Incentive would have to be it. After months of patiently waiting for legislation to be passed, then Royal Assent to be received, then information briefings to be held, you would think we were now well equipped to take the new R&D rules and start working with them.  Not quite.

For all the detail that has been released through legislation, Explanatory Memoranda, Fact Sheets, guidelines and case studies, there are still many areas that are uncertain and will require much more guidance before companies can confidently apply the rules to their own situation.

Most of these uncertain areas affect the scope of the eligibility to claim. This means that while you may have a pretty good idea that your company and project will be eligible for the New R&D Tax Incentive, just quite how much you can claim is still debatable.  For example, the boundaries of which activities will be eligible as Core R&D activities including the design of experiments are quite uncertain. Further, the “hot tub” of experts that meet regularly to discuss these areas are also still working through areas such as the design of the Advance or Overseas Findings form, an item that is expected to be a key tool companies will use to gain certainty prior to registration.

The reality is that many of these details and extra guidance will not be available into well into the new year after January or February 2012.

This means that while we are almost 4 months into the 2012 financial year and we are itching to plan and make adjustments to our businesses for this new “incentive” program, we are going to have to treat 2012 as a transition year.  Most companies are being encouraged to continue business as usual, maintaining good records as they go and to otherwise sit tight until more information is forthcoming.

To this end our top three tips to make sure your company is on track for your claim are as follows:

1) record all labour hours contemporaneously. Labour-related R&D claims will be the winner with the new R&D Tax Incentive, so make sure you are tracking your hours as you go as this will maximise your claim.

2) record all experiments in detail. Write down what you learned by undertaking the experiment, what equipment was used and for how long.

3) research your technology status. Undertake patent, literature or google searches to demonstrate the newness of your ideas. Make sure to print and record all your findings.

R&D SmartTax’s Template Package is a great starting point to make sure you are capturing your information for your claim. Our Labour Record will help you record your hours contemporaneously and the R&D Trial Record will ensure all the details are captured for your experiments. To download our Template Package, please click here.

To keep up to date with the latest information about the R&D Tax Incentive, please email us at [email protected] and we will add you to our mailing list.

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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