Our previous commentaries on the Federal Government’s new Research & Development tax incentive program have focused on some of the technical or compliance aspects of making a claim. Issues such as registration of activities, legal structure and types of expenditure are of course all vital to eventual success. But how does this occur in practice?
The essence of any R&D assignment includes a comprehensive review with key people about the activity and costs, robust documentation and a clear trail of how the claim has been quantified. This process not only informs a client about the merit of their claim before it is submitted to the ATO, but will also underpin any substantiation work should it be required down the way. At Eundo there exists a wealth of experience with the now-discontinued R&D tax concession that gives us the confidence to professionally attend to any claim under the new R&D system which has operated from 1 July 2011.
A tax practitioner registered with the ATO will work closely with every client to identify the obvious, direct R&D costs, but also a myriad of internal expenditure such as on personnel, capital, travel and other overheads. This process is essential to capture the full breadth of a legitimate claim and to deliver the financial benefit that the R&D legislation intends.
Some R&D tax claims can appear to be a lot of work, but Eundo’s position is that the benefit of a substantially increased tax incentive and perhaps even a cash refund should not be underestimated!
