R&D Tax Incentive – Joint Review

R&D Tax Incentive - A Joint Review

So you received this letter!

Get ready for an audit
Call Bulletpoint on 1300 658 508

 


What is the Joint Review of the R&D Tax Incentive Claim ?

The Joint Review of the R&D Tax Incentive Claim is a process conducted by the Australian Taxation Office (ATO) and the Department of Industry, Science and Resources (DISR) to ensure the legitimacy and compliance of R&D claims for the 2022 income year. This review involves a random selection of entities and aims to maintain the integrity of the R&D Tax Incentive program.  


What Does It Mean? – Get Ready for an Audit!

It means that your R&D Tax Incentive claim is under scrutiny, and you need to prepare for a detailed examination of your R&D activities and expenses. 

 

What Do You Need to Do?

First of all, book a meeting with us here – $295 is a small price to pay to potentially save you from having to repay thousands.

The main thing we need to do is strip away all the non-essential details and find the core activity that underpins your R&D work. If we can’t find a core activity, then you’re in trouble. But don’t worry – we excel at identifying and highlighting it.

Next, we get you laser-focused on expanding that core activity and gathering the information you already have to support it. We transform your claim 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.


What to Expect from the ATO

On the ATO side, the focus will be on the eligibility of your R&D expenditures. They will examine your financial records to ensure that all claimed expenses directly relate to your R&D activities. This isn’t just about numbers; it’s about making sure your expenditures align with the core R&D activities you’ve identified.

Be prepared to provide detailed breakdowns and justifications for each expense. The ATO will look for evidence that supports the claimed costs, so having clear, organised documentation is crucial. We can help you align your financial records with your R&D narrative, ensuring everything is in order.

Remember, the ATO’s goal is to ensure compliance and integrity in the use of the R&D Tax Incentive. By working with us, you’ll be equipped to present a clear, cohesive, and compliant claim that stands up to their scrutiny.

 

Struggling to organize your R&D

documentation for the ATO and DISR review?

call 1300 658 508

 


Real-World Example: Turning Potential Disaster into Success

Let’s look at a real-world example of how we transformed a client’s R&D application and saved them from a potential audit disaster.

A client came to us with their R&D application for a dog collar, and it was clear they were heading straight for an audit. Their submission lacked a clear core activity and read more like a marketing pitch. They detailed how great their product was, the problem it solved, and its market potential, but none of that qualifies as R&D.

Here’s how we turned it around:

Original Application:

  • Project Objectives: The client aimed to create a locking dog leash and adjustable collar that would be convenient for dog owners, attractive, cost-competitive, functional, durable, and safe for the animal. They wanted to manufacture this product and market it to dog owners in Australia and overseas.
  • Core Activity – 3D Print a 1:1 Scale Block Model: The hypothesis was to determine the most appropriate size of the collar and leash to ensure the product was suitable and comfortable for dogs in their target market.
  • Core Activity – Building a Functional Mechanical Prototype: The hypothesis involved designing a system that utilised a single lock mechanism to secure both the collar to the dog and the lead to the collar.
  • Core Activity – Mechanical Layout Concepts: The hypothesis suggested creating a specific mechanical architecture to meet their stated objectives.

While these activities had some elements of R&D, they weren’t articulated in a way that highlighted the scientific and technological challenges.

Revised Application: We refocused the application on the core scientific challenges:

  • Experiment Background: Highlighted the increase in dog thefts in Australia since COVID-19 and the need for a secure way to tether a dog when entering a café or shop.
  • Previous R&D: Described the shortcomings of existing products and previous failed attempts by an industrial design firm to create a secure dog lead.
    • Hypothesis: The experiment hypothesised that a dog collar and lead could be designed to:
      Separate the lead from the collar for ease of use.
      Prevent resizing once locked to deter theft.
      – Resist cutting by handheld devices.
      – Withstand a force test of 200kg for durability.
      – Weigh no more than 300g combined for comfort.
      – Allow a bend radius of 5cm without kinking for flexibility.
      – Be waterproof to 5,000mm for all-weather use.
      – Pass the manufacturing test for reliable production.
      Fit collar sizes from 25cm to 43cm for various dog sizes.

Unknown Outcomes:

  • Whether the connection between the dog lead and collar would pass the force test.
  • Whether the variables for weight, strength, and bend radius could be optimised.
  • Whether a product could be designed that passes all tests and can be manufactured reliably.


Don’t risk your R&D claim getting rejected;

message Bulletpoint to
https://www.bulletpoint.com.au/contact/

 

What is your risk of an audit?

At Bulletpoint, we understand that dealing with the R&D Tax Incentive program can be challenging. From identifying core activities to ensuring your claims are audit-proof, we’re here to help. With over 10 years of experience and more than 500 successful R&D applications, we have the expertise to guide you through the process.

We don’t just make your project sound impressive; we prove the genuine R&D involved. Our approach is simple yet effective: identify the core activity, build a strong narrative around it, and support it with solid evidence. This ensures your application is robust and can withstand scrutiny.

Take the example of our client with the dog collar R&D project. Initially, their submission lacked a clear core activity and read more like a marketing pitch. We stepped in, stripped away the unnecessary details, and focused on the real R&D work. By identifying and highlighting the core scientific and technological challenges, we transformed their application into a strong, defensible claim.

This is just one of the many success stories we’ve created at Bulletpoint. We’ve defended claims against both the ATO and AusIndustry, ensuring our clients not only secure their tax incentives but also avoid costly repayments.

So, if you’re facing an AusIndustry review or want to make sure your R&D claim is rock-solid, reach out to Bulletpoint. We’re here to make sure your hard work in R&D gets the recognition and support it deserves.

Need help with your R&D tax incentive? Contact Bulletpoint today.

What is the #1 grant for start-ups?

12,000+ companies access the R&D tax incentive per year that yields a CASH REBATE of up to 43.5%.
This might be perfect your start up.
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