R&D Tax Incentive end of year planning

0
6375

// With so much uncertainty around, thank goodness for the R&D tax incentive – here’s what you need to know…

Recently, the wonderful folks at RSM have sent us some great information about the R&D tax incentive scheme. RSM also have come on board as a sponsor of Startup News, so welcome RSM, and thanks…!

Change

When times are in such flux, it’s more important than ever to plan for the R&D Tax Incentive (RDTI) to ensure you have robust documentation in place, to secure much-needed R&D funds.

Further, over the past 12 months significant activity has been witnessed in the administration of the RDTI and in R&D tax law. Understanding these developments is important to maximising the potential from the upcoming 2020 R&D claim.

The summary below outlines the key items to look out for and documents to prepare leading up to year end.

Recent Developments in R&D Tax

What a year it has been in the R&D Tax space!

Key events have included the first case law on core eligibility definitions and a broad, sweeping review of the R&D Tax Incentive by the Australian Small Business and Family Enterprise Ombudsman (“the ASBFEO”), amongst others.

Arising from these actions, the compliance landscape and the lens from which R&D Tax program should be viewed has changed dramatically.

The landmark Moreton Resources Case, plus some other cases and a recent Small Ombudsman Report have led to a detailed review by AusIndustry. There have also been changes due to onset of COVID-19.

Speak to an expert about this.

Pre-30 June Checklist

With the 30 June 2020 year end rapidly approaching, it is a critical time to collate and review key R&D processes and documentation within your business.

The requirement for contemporaneous documentation to substantiate R&D activities and expenditure is ongoing and is the cornerstone of any robust R&D claim.

Prior to 30 June, RSM highly recommends the following actions:

  1. Examine available supporting R&D documentation for technical/scientific components of the R&D claim, as well as
    timesheets and financial information to specifically evidence costs and time spent on R&D activities. We recommend that you collate such documentation, and record any further information not yet recorded with clear timestamps to evidence documentation has been kept within the income year.
  2. If you are commencing new R&D activities, you must ensure the correct governance framework and templates are in place. With existing R&D activities, documentation and templates should reflect why ongoing R&D is required and the technical unknowns remaining. Please contact us immediately if you require assistance in this regard.
  3. Examine associate relationships and pay outstanding R&D amounts incurred to associates prior to year-end. This could materially impact your R&D claim.
  4. Contact RSM immediately if you have any questions regarding the above or require additional templates to compile the relevant information.

There will be more information on RDTI in subsequent posts.

Steve Elias from RSM is holding a FREE online information session (over Zoom) all about the R&D Tax Incentive scheme on Tues 7th July at 11am WA time.

REGISTER HERE to attend the free online session.

~~

Steve Elias, RSM

Based in RSM’s Perth office, Steve is a Principal in the Tax Services division providing specialist R&D tax incentive consulting services. Since 2007, Steve has provided R&D tax advice to a range of diverse industries across Australia.

Prior to joining RSM in 2012, Steve was a member of the R&D tax incentive group at a big four accounting firm.

Preceding his R&D tax incentives career, Steve worked as an industrial Chemist where his responsibilities included the development and synthesis of various products and substrates and the introduction and application of these into client operations.

~~

MAIN IMAGE: Photo by Startup Stock Photos from Pexels