The r&d tax incentive landscape in Australia has undergone significant changes during 2024 and 2025, with new regulations, compliance requirements, and exclusions that directly impact how businesses can claim this valuable innovation funding. As we navigate through the 2024–2025 financial year, staying informed about these changes is crucial for maximising your R&D tax benefits whilst ensuring compliance with the updated requirements.
This comprehensive guide, brought to you by the experts at Bulletpoint, outlines all the key changes affecting the R&D Tax Incentive program and provides practical guidance on how these updates impact your business. Ben Cusack and the Bulletpoint team have been closely monitoring these developments to ensure our clients remain compliant and continue to maximise their R&D tax benefits.
Gambling and Tobacco Exclusions: The Most Significant Change
The most substantial change to the R&D Tax Incentive program is the exclusion of gambling and tobacco-related R&D activities from eligibility.
What’s Changing
From 1 July 2025, R&D activities relating to gambling and tobacco will no longer qualify for the R&D Tax Incentive. This represents a significant policy shift from the program’s traditional industry-agnostic approach.
The Federal Government announced this change as part of the 2024-25 Mid-Year Economic and Fiscal Outlook. The intention is to redirect government R&D support towards activities with better social outcomes and align funding with national priorities.
Important Exception: Harm Reduction
Activities conducted for the sole purpose of harm reduction will remain eligible for the R&D Tax Incentive. This exception recognises the value of research aimed at reducing the negative impacts of gambling and tobacco.
Examples of potentially eligible harm reduction activities include developing self-exclusion tools for problem gamblers, creating technologies to reduce gambling addiction, researching tobacco dependency reduction methods, and developing products that minimise health risks associated with tobacco use.
What This Means for Affected Businesses
If your business operates in the gambling or tobacco sectors, you need to carefully review your R&D activities before the 1 July 2025 deadline.
For activities conducted before 1 July 2025, you can still claim the R&D Tax Incentive under the existing rules. However, for income years starting on or after 1 July 2025, gambling and tobacco-related R&D will be excluded unless it meets the harm reduction exception.
Businesses in these sectors should consider whether any of their R&D activities can be reclassified as harm reduction work. They should also explore alternative innovation funding sources and adjust their R&D strategies accordingly.
Legislative Status
As of October 2025, the legislation to implement this exclusion has not yet been introduced into Parliament. However, businesses should prepare for these changes to take effect as announced.
The lack of detailed guidance on what constitutes “harm reduction” creates some uncertainty. Businesses conducting R&D in these sectors should seek expert advice from specialists like Ben Cusack at Bulletpoint to understand how the exclusions will apply to their specific activities.
New R&D Application Form: Increased Compliance Requirements
In August 2025, the Department of Industry, Science and Resources (DISR) released a substantially revised R&D application form that increases the information required from claimants.
Key Changes to the Application Form
The new form includes additional questions that were not previously required. Many of these questions are similar to those in the Advance Finding form, which is designed for formal examination of activity eligibility rather than registration in a self-assessment program.
Expanded character limits for responses have been introduced, ostensibly to make it easier for businesses to provide detailed information. Whilst this expansion is welcomed, it also means more comprehensive responses are expected.
New questions about project influence ask claimants to indicate how much the R&D Tax Incentive influenced their decision to proceed with the project. Response options are limited to “significantly,” “somewhat significantly,” or “not at all.”
Beneficiary questions that are more relevant to ATO compliance than activity eligibility have been added. These questions aim to identify who ultimately benefits from the R&D work.
Documentation requirements have been strengthened, with the form encouraging applicants to provide stronger evidence of the types of records they maintain to substantiate their claims.
Industry Concerns
The new form has been criticised by industry for adding layers of compliance that many view as duplicative, overly prescriptive, and misaligned with the self-assessment nature of the r&d tax incentive program.
Many of the additional questions appear superfluous for most claimants. For example, questions about whether activities are covered by a Determination are only relevant to the small number of businesses conducting clinical trials.
The form was released with immediate effect on 15 August 2025 with minimal consultation from industry. This lack of consultation period has created challenges for businesses and advisers who need to adapt to the new requirements quickly.
What This Means for Your Business
You need to allocate more time and resources to completing the R&D application form. The additional questions require more detailed responses and supporting information.
Ensure your documentation systems are robust enough to answer the new questions about record-keeping practices. The form explicitly asks about the types of contemporaneous records you maintain.
Consider engaging R&D tax specialists like Bulletpoint to help you navigate the new form requirements and ensure your responses are comprehensive and compliant.
Start preparing your application earlier in the process. The additional information required means you can’t leave the application to the last minute.
R&D Tax Incentive Transparency Reports: Public Disclosure of Claims
The ATO has begun publishing annual R&D Tax Incentive Transparency Reports, making certain information about R&D claims publicly available.
What Information Is Published
The transparency reports include the name and ABN or ACN of every company that claims the R&D Tax Incentive, along with their total R&D expenditure and adjusted total R&D expenditure for each income year.
This information is now publicly searchable, allowing anyone to see which companies are claiming the R&D Tax Incentive and how much they’re spending on R&D activities.
Reports Published to Date
The first transparency report was published in October 2024, covering the 2021-22 income year. This report showed that 11,545 companies claimed the R&D Tax Incentive for a total of $11.2 billion in R&D expenditure.
The second transparency report was published in September 2025, covering the 2022-23 income year. This report showed that over 12,900 companies claimed the R&D Tax Incentive, with 46% being small businesses.
Purpose of Transparency Reports
The transparency reports aim to enhance public accountability, encourage compliance with program requirements, increase public awareness of which companies are investing in R&D, and provide data for policy analysis and program evaluation.
The legislation requiring these reports was passed in 2020, but the first report wasn’t published until 2024 due to implementation timelines.
Implications for Businesses
Your R&D claims are now publicly visible, which increases the importance of accuracy and defensibility. Competitors, investors, and other stakeholders can see your R&D expenditure levels.
The public nature of these reports may increase scrutiny of claims, both from regulators and from the public. Businesses should ensure their claims are robust and can withstand this increased visibility.
For some businesses, the transparency reports provide an opportunity to demonstrate their commitment to innovation and R&D investment to stakeholders.
Increased Regulatory Scrutiny and Compliance Checks
The ATO and DISR have significantly increased their focus on R&D Tax Incentive compliance during 2024 and 2025.
Joint Compliance Activities
The ATO and DISR are working more closely together to identify and address non-compliance. They share information about registrations and claims to ensure both technical and financial compliance.
This joint approach means that issues identified by either agency can trigger reviews by both. For example, if DISR identifies concerns about activity eligibility, the ATO may also review your expenditure claims.
Risk-Based Approach
DISR has announced a shift to a risk-based approach for activity reviews. Informal risk assessments and education visits that were previously offered will no longer occur.
Instead, DISR will conduct formal examinations only where they are concerned that a taxpayer has a “high risk of ineligibility.” However, there is currently no published guidance on what constitutes “high risk of ineligibility.”
Stricter Review Standards
DISR has indicated that if they find one statutory element of an activity is not satisfied or substantiated, the entire activity will be rejected without further analysis.
This represents a stricter approach than previously applied, where DISR might work with claimants to understand and assess activities more comprehensively.
What This Means for Your Business
Ensure your documentation is comprehensive and contemporaneous. Don’t wait until you receive an audit notification to gather your records.
Each R&D activity you claim must clearly satisfy all the statutory requirements. A weakness in any single element can result in the entire activity being rejected.
Consider conducting internal reviews of your R&D claims before lodging them. Identify and address potential weaknesses proactively rather than waiting for regulators to find them.
Engage with R&D tax specialists like Ben Cusack at Bulletpoint who understand the current compliance environment and can help you prepare defensible claims.
Updated Guidance Materials for Software Development
In June 2024, DISR released updated guidance specifically for software-related R&D activities, reflecting ongoing confusion about what qualifies as eligible R&D in this sector.
Key Clarifications in the Software Guidance
The updated guidance emphasises the distinction between routine software development and genuine R&D activities. Not all software development qualifies as R&D, even if it’s technically sophisticated.
New algorithms and novel approaches to solving computational problems typically qualify as core R&D activities, provided they meet all the statutory requirements including technical uncertainty.
Machine learning and AI development can qualify when you’re experimenting with fundamentally new approaches or applying techniques in ways where the outcome cannot be determined in advance.
Bug fixes, debugging, and routine maintenance generally do not qualify as R&D, even if they’re technically challenging. These are considered routine software development activities.
User interface design and user experience improvements that are primarily aesthetic rather than technically innovative typically don’t qualify as R&D.
Software developed for internal administration of business functions is excluded as core R&D but may qualify as supporting R&D activities if it directly supports eligible core R&D activities.
Updated Guide to Interpretation
DISR also updated the general “Guide to Interpretation” in June 2024. This guide provides enhanced detail on record-keeping expectations and clarification on what constitutes “current knowledge.”
The updated guidance emphasises that records must be contemporaneous—created at the time R&D activities are conducted, not reconstructed retrospectively.
The guide clarifies that “current knowledge” refers to knowledge available to competent professionals in the relevant field at the time you commence your R&D activities.
Implications for Software Companies
Software companies need to carefully assess their development activities against the updated guidance. Not all development work will qualify, even if it’s innovative from a business perspective.
Focus your R&D claims on activities that involve genuine technical uncertainty and experimentation. Clearly document the knowledge gaps you’re attempting to fill and why existing solutions were inadequate.
Maintain detailed records of your experimental work, including failed approaches and iterative improvements. This documentation is crucial for demonstrating the experimental nature of your activities.
Consider whether activities excluded as core R&D might qualify as supporting R&D activities if they directly support eligible core R&D work.
Strategic Examination of Australia’s R&D System
The Australian Government initiated a comprehensive Strategic Examination of Research and Development in 2024, which could lead to further significant changes to the R&D Tax Incentive program.
Purpose and Scope
An independent panel was established to conduct a strategic examination of Australia’s entire R&D system, including the R&D Tax Incentive, direct grant programs, and research infrastructure.
The examination aims to ensure Australia’s R&D investments are effective, aligned with national priorities, and competitive internationally.
Consultation Process
In February 2025, the panel released a discussion paper for public consultation. The paper examined the current state of Australia’s R&D system, barriers and risks impacting R&D competitiveness, and ways to ensure equitable distribution of R&D benefits.
The panel received 470 submissions following the discussion paper’s release, indicating strong industry interest in potential reforms.
Further consultation was planned throughout 2025, with additional issue papers released in July 2025 for public comment.
Expected Timeline and Outcomes
The panel is expected to report its findings to the Federal Government in December 2025, outlining a strategic path forward for strengthening Australia’s R&D system.
Recommendations could include changes to the R&D Tax Incentive program structure, modifications to eligibility criteria or offset rates, new approaches to supporting collaboration between industry and research institutions, and enhanced focus on commercialisation of R&D outcomes.
What This Means for Your Business
Be aware that further changes to the r&d tax incentive program may be announced following the strategic examination’s final report in December 2025.
Consider participating in consultation processes if you have views on how the R&D Tax Incentive could be improved. Industry input is valuable in shaping policy decisions.
Stay informed about the examination’s progress and recommendations through industry associations and R&D tax specialists like Bulletpoint.
Plan for potential changes but don’t let uncertainty prevent you from claiming current entitlements. The R&D Tax Incentive remains available and valuable under existing rules.
Key Tribunal Decision: Body by Michael Case
In early 2025, the newly established Administrative Review Tribunal (ART) handed down its first ruling in an R&D Tax Incentive case, providing important guidance on eligibility requirements.
Case Background
In Body by Michael Pty Ltd and Industry Innovation and Science Australia [2025] ARTA 44, the ART ruled on whether the taxpayer’s claimed activities met the requirements for core R&D activities.
The case involved activities related to developing fitness and wellness products. The taxpayer claimed these activities constituted eligible R&D.
Key Findings
The ART ruled that Body by Michael’s activities did not meet the requirements for qualifying R&D. The decision highlighted several critical deficiencies in how the taxpayer approached and documented their claimed R&D.
Inability to prove unknown outcomes: The taxpayer was unable to demonstrate that the outcome of the activities was unknown or could not be determined in advance by a competent professional.
Lack of hypothesis: In the absence of a hypothesis being formed at the outset of the work (it was formed in a later year), the ART could not accept that there was a genuine experiment being conducted.
Failure to describe the experiment: The taxpayer did not adequately describe the experiment or establish the knowledge gap and degree of uncertainty that an eligible experiment must seek to address.
Insufficient analysis: Little to no analysis was documented to support the conclusions drawn, nor was it clear why the conclusions were logical based on the experimental work.
Incomplete systematic progression: Whilst the ART was satisfied that hundreds of tests were undertaken systematically, they were not satisfied that the taxpayer had undertaken the required systematic progression of work from hypothesis to experiment, observation and evaluation, leading to logical conclusions.
Implications for All Claimants
The Body by Michael case reinforces the importance of contemporaneous documentation that clearly demonstrates all elements of the R&D eligibility criteria.
You must be able to prove that outcomes were unknown at the outset of your work. Simply conducting tests or experiments is not sufficient if a competent professional could have predicted the results.
Forming a hypothesis before commencing experimental work is crucial. Retrospectively identifying a hypothesis after you’ve already conducted the work is not acceptable.
You need to clearly articulate the knowledge gap you’re attempting to fill and why existing knowledge or methods were inadequate for your purposes.
Analysis and evaluation of experimental results must be documented, showing how you drew logical conclusions from your observations.
The systematic progression of work must be evident in your records, demonstrating the scientific method from hypothesis through to conclusions.
Changes to Associate Payment Rules: Timing Requirements
An important compliance requirement that continues to catch businesses out relates to payments made to associates for R&D work.
The Associate Payment Rule
If you incur R&D expenditure by engaging an associate (such as a related company, trust, or individual with significant influence over your business), special rules apply.
You can only claim the R&D expenditure in the income year if the amount has been paid to the associate before the end of that income year.
This is different from the normal tax treatment of expenses, which are generally deductible on an accrued basis rather than requiring actual payment.
What “Paid” Means
The term “paid” takes its ordinary meaning under income tax law and includes constructive payment. This means that actual transfer of funds must occur, or there must be a constructive payment such as offsetting debts.
Simply raising an invoice or recording the expense in your accounts is not sufficient. The payment must actually be made by 30 June to claim the expenditure in that income year.
Consequences of Late Payment
If you don’t pay your associate by the end of the income year, you have two options:
You can forgo the R&D tax offset altogether and claim a normal tax deduction for the expenditure on an incurred basis (if otherwise deductible).
Alternatively, you can defer your R&D claim for that expenditure until the income year in which you actually make the payment.
Planning Considerations
If you engage associates for R&D work, ensure you have sufficient cash flow to pay them before 30 June if you want to claim the expenditure in that income year.
Consider the timing of associate payments as part of your year-end tax planning. Late payment can result in losing a year’s worth of R&D tax offset benefit.
Document the payment date clearly, including bank statements or other evidence showing when funds were transferred.
Be aware that the ATO scrutinises associate payments carefully due to the potential for arrangements designed to artificially inflate R&D claims.
Practical Steps for Navigating the 2024–2025 Changes
Given the significant changes to the R&D Tax Incentive program, businesses need to take proactive steps to ensure compliance and maximise their benefits.
Review Your R&D Activities Against Updated Criteria
Conduct a comprehensive review of all your R&D activities to ensure they meet the current eligibility criteria under the updated guidance materials.
For software development activities, carefully assess whether your work constitutes genuine R&D or routine development using the updated software guidance.
If you operate in the gambling or tobacco sectors, identify which activities may be affected by the new exclusions and whether any qualify as harm reduction work.
Document the technical uncertainty in your R&D activities clearly. Ensure you can demonstrate that outcomes could not be known in advance by a competent professional.
Strengthen Your Documentation Systems
Implement robust systems for capturing contemporaneous records of your R&D activities as they occur. Don’t rely on reconstructing records retrospectively.
Ensure your documentation clearly demonstrates all elements of the eligibility criteria: unknown outcomes, systematic progression of work, hypothesis formation, experimentation, observation, evaluation, and logical conclusions.
Maintain detailed records of expenditure, including timesheets for staff, invoices from contractors, and evidence of how costs have been apportioned between R&D and non-R&D activities.
Keep records for at least five years after making a claim, as regulators can request them at any time during this period.
Prepare for the New Application Form Requirements
Familiarise yourself with the new R&D application form released in August 2025 and the additional information it requires.
Allocate sufficient time to complete the form thoroughly. The expanded questions and character limits require more detailed responses than previous versions.
Gather information about your documentation practices, as the form specifically asks about the types of contemporaneous records you maintain.
Consider engaging R&D tax specialists like Bulletpoint to assist with completing the form, particularly if you’re claiming for the first time or have complex R&D activities.
Plan for Increased Scrutiny
Assume that your R&D claim may be reviewed by the ATO or DISR. Prepare your claim as if you’ll need to defend it in an audit.
Conduct internal reviews of your R&D activities and documentation before lodging your claim. Identify and address potential weaknesses proactively.
Ensure consistency between your R&D application to DISR and your expenditure claim in your tax return to the ATO. Inconsistencies can trigger reviews.
Be prepared to provide detailed explanations and supporting evidence for all aspects of your claim if requested by regulators.
Seek Expert Advice Early
Don’t wait until you’re preparing your claim to seek advice about eligibility and compliance. Engage with R&D tax specialists early in your R&D process.
Ben Cusack and the team at Bulletpoint can help you identify eligible R&D activities, implement appropriate documentation systems, navigate the new application form requirements, and prepare robust claims that can withstand regulatory scrutiny.
Expert advice is particularly valuable given the increased complexity and compliance requirements introduced in 2024 and 2025.
The cost of engaging specialists is typically far outweighed by the increased benefits secured and the reduced risk of claim rejection or penalties.
Stay Informed About Further Changes
Monitor developments from the Strategic Examination of R&D, which will report in December 2025 and may recommend further changes to the program.
Subscribe to updates from the ATO, DISR, and industry associations to stay informed about new guidance, legislative changes, and administrative updates.
Maintain regular contact with your R&D tax advisers who can alert you to changes that affect your business and help you adapt your approach accordingly.
Be prepared to adjust your R&D strategy and claims process as further changes are implemented following the strategic examination’s recommendations.
Working with Bulletpoint: Expert Guidance Through Changing Times
The significant changes to the R&D Tax Incentive program during 2024 and 2025 have increased the complexity of claiming this valuable benefit. Navigating these changes whilst ensuring compliance and maximising your entitlements requires specialised expertise.
Bulletpoint’s Comprehensive Support
Ben Cusack and the team at Bulletpoint have been closely monitoring all developments affecting the R&D Tax Incentive program. We provide comprehensive support to help businesses adapt to the new requirements whilst continuing to claim their full entitlements.
Our services include eligibility assessments under the updated criteria and guidance materials, documentation system design to ensure you capture the right information in real-time, application preparation using the new form and addressing all the additional requirements, expenditure calculation ensuring accuracy and compliance with all the technical rules, and audit defence if your claim is selected for review by the ATO or DISR.
Industry-Specific Expertise
Bulletpoint has extensive experience across all industries, including those most affected by recent changes such as software development, gambling and tobacco sectors, and emerging technology fields.
We understand the specific challenges different industries face in demonstrating R&D eligibility and can help you articulate your activities in ways that clearly meet the legislative requirements.
Our team stays current with all sector-specific guidance materials and can advise on how updated interpretations affect your particular industry.
Proactive Compliance Management
Rather than waiting for problems to arise, Bulletpoint takes a proactive approach to compliance management. We help you identify and address potential issues before they become problems in an audit.
Our regular health checks of your R&D claims and documentation can identify gaps or weaknesses early, allowing you to strengthen your position before regulators review your claim.
We provide ongoing support throughout the year, not just at claim time, ensuring your R&D documentation practices remain robust and compliant with current requirements.
Navigating Uncertainty
With the Strategic Examination of R&D still underway and further changes likely in 2026, businesses need advisers who can help them navigate uncertainty whilst continuing to claim current entitlements.
Bulletpoint provides strategic advice on how to position your business for potential future changes whilst maximising benefits under current rules.
We monitor policy developments closely and keep our clients informed about potential changes that may affect their R&D tax planning.
Conclusion: Staying Compliant in a Changing Landscape
The R&D Tax Incentive program has undergone significant changes during 2024 and 2025, with more changes likely following the Strategic Examination of R&D in December 2025. These changes have increased the complexity and compliance burden for businesses claiming this valuable innovation funding.
The exclusion of gambling and tobacco-related R&D from 1 July 2025 represents a fundamental shift from the program’s industry-agnostic approach. The new R&D application form requires substantially more information than previous versions. Transparency reports now make R&D claims publicly visible. Increased regulatory scrutiny means claims must be more robust and defensible than ever.
Despite these challenges, the R&D Tax Incentive remains one of the most valuable programs available to innovative Australian businesses. Companies that conduct genuine R&D activities and maintain proper documentation can continue to claim substantial tax offsets or refunds.
The key to success in this changing environment is staying informed about new requirements, implementing robust documentation systems from the outset, seeking expert advice early in your R&D process, and preparing claims that can withstand increased scrutiny.
Don’t let the complexity of recent changes prevent you from claiming your full R&D Tax Incentive entitlements. With proper guidance and preparation, you can navigate these changes successfully whilst maximising your innovation funding.
Contact Ben Cusack at Bulletpoint today for expert guidance on navigating the R&D Tax Incentive changes and ensuring your business remains compliant whilst maximising your benefits.
Frequently Asked Questions (FAQs)
If your business conducts R&D activities related to gambling or tobacco, these activities will be excluded from R&D Tax Incentive eligibility for income years starting on or after 1 July 2025. This is a significant change that requires immediate attention if you’ve been claiming R&D in these sectors. However, there is an important exception: activities conducted for the sole purpose of harm reduction will remain eligible. This means if your R&D focuses on reducing the negative health or social impacts of gambling or tobacco—such as developing self-exclusion tools for problem gamblers, creating technologies to reduce addiction, or researching dependency reduction methods—you may still be able to claim the R&D Tax Incentive. The challenge is that detailed guidance on what constitutes “harm reduction” has not yet been published, creating some uncertainty. For income years ending before 1 July 2025, you can still claim gambling and tobacco-related R&D under the existing rules. If you operate in these sectors, you should urgently review your R&D activities with specialists like Ben Cusack at Bulletpoint to determine which activities may still qualify under the harm reduction exception and explore alternative innovation funding sources for excluded activities. You should also consider adjusting your R&D strategy to focus on areas that will remain eligible or that clearly fall within the harm reduction category.
The new R&D application form released by DISR on 15 August 2025 represents a substantial increase in the information required from claimants compared to previous versions. Key changes include numerous additional questions that were not previously required, many of which are similar to questions in the Advance Finding form designed for formal examination rather than self-assessment registration. The form now asks about how much the R&D Tax Incentive influenced your decision to proceed with projects, with limited response options of “significantly,” “somewhat significantly,” or “not at all.” New beneficiary questions aim to identify who ultimately benefits from the R&D work, which are more relevant to ATO compliance than activity eligibility. The form includes strengthened documentation requirements, explicitly asking about the types of contemporaneous records you maintain to substantiate your claims. Whilst character limits have been expanded to allow more detailed responses, this also means more comprehensive answers are expected. The form was released with immediate effect and minimal industry consultation, creating challenges for businesses that need to adapt quickly. Industry feedback has been critical, with many viewing the additional questions as duplicative, overly prescriptive, and misaligned with the self-assessment nature of the program. To navigate the new form successfully, you should allocate significantly more time for completion, ensure your documentation systems can support the additional questions, and consider engaging R&D tax specialists like Bulletpoint to help you prepare comprehensive and compliant responses.
Yes, the Strategic Examination of Research and Development is likely to result in further changes to the R&D Tax Incentive program, though the specific nature and timing of these changes won’t be known until the independent panel reports its findings to the Federal Government in December 2025. The examination is comprehensive, covering Australia’s entire R&D system including the R&D Tax Incentive, direct grant programs, and research infrastructure. The panel released a discussion paper in February 2025 that examined the current state of Australia’s R&D system, barriers and risks impacting R&D competitiveness, and ways to ensure equitable distribution of R&D benefits. The strong response—470 submissions from industry, research organisations, and other stakeholders—indicates significant interest in potential reforms. Possible changes that could emerge from the examination include modifications to the R&D Tax Incentive program structure, adjustments to eligibility criteria or offset rates, new approaches to supporting collaboration between industry and research institutions, enhanced focus on commercialisation of R&D outcomes, and changes to compliance and administration processes. The examination’s terms of reference suggest a focus on ensuring Australia’s R&D investments are effective, aligned with national priorities such as clean energy and advanced manufacturing, and competitive internationally. Businesses should monitor the examination’s progress and be prepared for potential changes to be announced in 2026 following the December 2025 report. However, don’t let uncertainty about future changes prevent you from claiming your current entitlements—the R&D Tax Incentive remains available and valuable under existing rules, and any changes will likely include
The increased regulatory scrutiny from both the ATO and DISR during 2024 and 2025 means you need to approach your R&D Tax Incentive claim with the assumption that it will be reviewed. DISR has shifted to a risk-based approach where they will conduct formal examinations when they believe there is a “high risk of ineligibility,” and they’ve indicated that if any single statutory element of an activity is not satisfied or substantiated, the entire activity will be rejected without further analysis. This represents a stricter standard than previously applied. The ATO and DISR are also working more closely together, sharing information about registrations and claims to ensure both technical and financial compliance. Additionally, the publication of transparency reports makes your R&D claims publicly visible, potentially increasing scrutiny from competitors and other stakeholders. To prepare for this environment, you should implement robust contemporaneous documentation systems that capture information in real-time as R&D activities occur, rather than attempting to reconstruct records retrospectively. Ensure your documentation clearly demonstrates all elements of the eligibility criteria for each activity you claim: that outcomes could not be known in advance, that you followed a systematic progression of work from hypothesis through experimentation to logical conclusions, and that you generated new knowledge. Conduct internal reviews of your R&D activities and documentation before lodging your claim to identify and address potential weaknesses proactively. Ensure consistency between your R&D application to DISR and your expenditure claim to the ATO, as inconsistencies can trigger reviews. Most importantly, engage with R&D tax specialists like Ben Cusack at Bulletpoint early in your R&D process, not just at claim time, to ensure your documentation and approach will withstand regulatory scrutiny.
5. How can Bulletpoint help my business navigate all these changes to the R&D Tax Incentive program?
Bulletpoint provides comprehensive, end-to-end support to help businesses navigate the increasingly complex R&D Tax Incentive landscape whilst maximising their benefits and ensuring compliance with all the new requirements introduced in 2024 and 2025. Ben Cusack and the Bulletpoint team have been closely monitoring all developments affecting the program, including the gambling and tobacco exclusions, the new application form requirements, increased regulatory scrutiny, updated guidance materials, and the ongoing Strategic Examination of R&D. Our services include conducting detailed eligibility assessments of your R&D activities against the updated criteria and guidance materials, helping you identify which activities qualify and how to strengthen borderline cases. We design and implement robust documentation systems that capture the right information in real-time, ensuring you maintain contemporaneous records that will withstand audit scrutiny. Our team prepares comprehensive R&D applications using the new form, addressing all the additional questions and requirements whilst clearly articulating the experimental nature of your work. We calculate eligible expenditure accurately, handling complex scenarios such as overseas R&D, contractor arrangements, and associate payments. If your claim is selected for review by the ATO or DISR, we provide expert audit defence services, representing your interests and responding to information requests. Bulletpoint’s industry-specific expertise means we understand the particular challenges your sector faces in demonstrating R&D eligibility, whether you’re in software development, manufacturing, agriculture, biotechnology, or any other field. We take a proactive approach to compliance management, conducting regular health checks of your R&D claims and documentation to identify and address potential issues before they become problems in an audit. With the Strategic Examination of R&D likely to result in further changes in 2026, Bulletpoint provides strategic advice on how to position your business for potential future changes whilst maximising benefits under current rules. Contact Ben Cusack today for a confidential discussion about how Bulletpoint can help your business navigate the R&D Tax Incentive changes and secure the innovation funding you deserve.
Disclaimer: This article provides general information only and does not constitute professional advice. You should consult with a qualified R&D tax adviser to discuss your specific circumstances. The R&D Tax Incentive legislation and administrative practices are subject to change, and you should ensure you are working with current information. The information in this article is current as of October 2025.