R&D Tax Incentive – AusIndustry Review

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What is an AusIndustry Review?

An AusIndustry review checks your R&D activities to ensure they meet the requirements of the R&D Tax Incentive program, while the ATO looks at your expenses.

Why are they doing it?

Most likely, you don’t have a core activity, and your application is not very well articulated. We see it all the time – you describe how good your product is, the problem it solves, or the market opportunity, but guess what? This is not R&D. We need to find the science or a core activity. 

Don’t worry; this is quite common, but this is why you are being reviewed.

Worst case scenario, AusIndustry doesn’t think you are doing R&D, and you have to pay back the R&D grant. 

Definitely not good.

So What Do You Need to Do?

First of all, book a meeting with us here – $295 is a small price to pay to save potentially hundreds of thousands in repayments.

The main thing we need to do is take away all the BS R&D and find the core activity that we can hang all the other R&D work (supporting activities) on. If we can’t find a core activity, then you are in trouble. But don’t worry – we are skilled in finding and identifying it.

We then get you laser-focused on expanding that core activity and gathering the info you already have to support it. We change it from “we developed an app” to “we developed an algorithm to improve data security, and by the way, we needed an app to prove it.”

By honing in on the core scientific or technological challenge, we ensure your application is robust and can withstand scrutiny. This approach not only helps you secure your R&D tax incentive but also keeps you clear of potential audits and repayments.

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Real-World Example: Turning a Potential Audit into a Success

A client came to us after preparing their own R&D application for a dog collar. When I saw their submission, I instantly thought, “You are about to have a bad day and be audited.” It was clear that both they and AusIndustry didn’t see a core activity in their project, hence the review.

After a few consultations, we were able to change what sounded like BS into a clear and legitimate core activity. Here’s how we did it:

Original Application

Project Objectives
The objective for K9lock™ is to create a locking dog leash and adjustable collar that will be convenient to use for the dog owner, attractive and cost-competitive, functional, durable, and safe for the animal while enabling the owner to tether their pet securely when they temporarily leave them unattended. We also want the collar and leash to be separate items, not combined into one. This is important to enable the K9lock™ product to replace the regular collar and lead a user would currently be using. We intend to manufacture this product and market it to dog owners in Australia and overseas.

Core Activity – 3D Print a 1:1 Scale Block Model
Hypothesis: The most appropriate size of the collar and leash needs to be determined to ensure the K9lock™ product is appropriate and comfortable for dogs in our target market. The core knowledge produced was to evaluate the size of the product relative to a range of dogs in the target size range.

Core Activity – Building a Functional Mechanical Prototype
Hypothesis: A system must be designed that utilises a single lock mechanism to secure the collar to the dog and the lead to the collar, achieving the stated objectives of the K9lock™ project.

Core Activity – Mechanical Layout Concepts
Hypothesis: A specific mechanical architecture could be created to manufacture the K9lock™ product to meet our stated objectives.

 

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How I Rewrote It


Experiment Background
Recent crime statistics reveal a spike in the number of dogs being reported stolen in Australia since the onset of COVID-19. Reports indicate that dog thefts more than doubled in the first three months of lockdown compared to the previous year, reaching the highest level in five years with 238 dogs reported stolen between July 2019 and June this year. Consequently, dog owners are exercising far more caution. There is currently no way to securely fasten a dog to a pole when entering a café or shop to prevent theft. The company aims to design an integrated dog lead and collar to address this issue.

Previous R&D
The company reviewed numerous competitor products and found that the leads could be easily removed from the collar, collars could be removed from the lead, and leads could be cut with scissors or wire cutters. Alternatively, some designs required the lead and collar to be one device, making it time-consuming to put on. An industrial design firm was previously commissioned to design an anti-theft dog lead, but it failed numerous tests.

Hypothesis
The experiment hypothesises that a dog collar and lead can be designed that:

  • Separate the lead from the collar – to ensure ease of use.
  • Prevent resizing once locked – to deter theft.
  • Resist cutting by handheld devices – like pliers or wire cutters (excluding bolt cutters or angle grinders).
  • Withstand a force test of 200kg – ensuring durability.
  • Weigh no more than 300g combined – for comfort and practicality.
  • Allow a bend radius of 5cm without kinking – maintaining flexibility.
  • Be waterproof to 5,000mm – for all-weather use.
  • Pass the manufacturing test – ensuring it can be produced reliably.
  • Fit collar sizes from 25cm to 43cm – accommodating various dog sizes.

Unknown Outcomes

No existing anti-theft dog lead meets these criteria, and competitor products have failed the specified tests. The core unknown outcomes are whether:

  • The connection between the dog lead and collar will pass the force test – existing solutions fail, and anything too strong is not removable.
  • The variables for weight, strength, and bend radius can be optimised – these typically counteract each other.
  • A product can be designed that passes all tests and can be manufactured – ensuring feasibility.

By identifying and focusing on a clear core activity, we transformed the client’s application into a robust R&D submission that could withstand scrutiny, avoiding a potential audit.

 

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How turned around their Dog S#!%… I mean Dog Collar

When the client first came to us with their R&D application for the dog collar, it was clear they were headed straight for an audit. The submission lacked a clear core activity and read more like a marketing pitch than an R&D claim. We see this all too often – lots of fluff but no substance.

But this is where we shine. With a few strategic consultations, we stripped away the unnecessary details and honed in on the real R&D work. We dug deep to uncover the core scientific and technological challenges, transforming the application from vague and vulnerable to precise and powerful.

Our approach is simple yet effective: Identify the core activity, build a strong narrative around it, and support it with solid evidence. It’s not about making your project sound impressive; it’s about proving the genuine R&D involved.

You know what to do

At Bulletpoint, we get it – dealing with the R&D Tax Incentive program can be tough. From nailing down core activities to making sure your claims are audit-proof, we’ve got you covered. With over 10 years in the game, we’ve successfully lodged over 500 R&D applications and defended many against both ATO and AusIndustry reviews and audits.

We’re pros at finding the real scientific or technological core activities in your projects, making sure your claims are solid and compliant. Don’t just take our word for it – check out our Google reviews and see why we’re Australia’s highest-rated R&D tax consultant with over 250 reviews and a 4.8-star rating.

Need help with your R&D tax incentive? Reach out to Bulletpoint today.

  • Call Bulletpoint on 1300 658 508
  • Send us a message here
  • Book a meeting now  here – $295 

FAQ

An AusIndustry review checks if your R&D activities meet the criteria for the R&D Tax Incentive program.

You may be selected if your application lacks clear core activities or if there are questions about your R&D claims.

AusIndustry looks for documented evidence of core and supporting R&D activities that comply with the program’s guidelines.

Ensure your R&D activities are well-documented, focusing on the scientific or technological challenges and the methods used to overcome them.

If your claim is non-compliant, you may have to repay the R&D tax offset and could face penalties.

The review process can vary but generally takes a few months. It’s important to respond promptly to any requests for information.

Yes, if you disagree with the review outcome, you can appeal the decision through the appropriate channels.

Common mistakes include vague descriptions of activities, lack of documented evidence, and focusing on business benefits rather than scientific research.

Bulletpoint can help by reviewing your application, identifying core activities, and ensuring your documentation is robust and compliant. Contact us today for expert assistance

Visit the official AusIndustry website or reach out to Bulletpoint for detailed guidance on the R&D Tax Incentive program.

 

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