R&D Tax Incentive Consultant
What is an R&D Tax Consultant?
An R&D Tax Consultant helps you to prepare and lodge and R&D application with AusIndustry. This will enable you to get a rebate back on your R&D costs.
Why are R&D Tax consultants needed?
Despite the Government’s efforts to cut red tape, R&D Tax Incentive applications still take a long time to write and prepare.
They can also be complex.
What is the main issue?
We find there is often a large difference between what the Government defines as R&D and what businesses regard as R&D. So, it is easy to get wrong.
What do R&D Tax Incentive consultants do?
Basically, we identify eligible R&D activities and identify eligible R&D costs.
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What are the main outputs from an R&D Tax Consultant?
An R&D Tax consultant will produce two main documents:
- R&D Activity Registration – This is the R&D application lodged with AusIndustry
- ATO R&D Tax Incentive Schedule – This is what goes to your accountant that includes the R&D details.
Can you do it yourself?
Like most things you can do it yourself if you have enough time—the R&D Tax Incentive is designed as a self-assessed application.
But you need to determine how long it will take and what the risks are to getting it wrong.
Many companies have been fined by the ATO for putting in an ineligible claim.
Why doesn’t my accountant prepare the R&D tax incentive application?
While the R&D Tax Incentive is prepared by tax advisors, typically R&D Tax incentive consultants are scientists or come from STEM backgrounds.
Accountants can prepare some of the R&D Tax Incentive information, but 95% of the work is non-financial.
They need to understand the scientific experimentation process, things like hypothesis testing.
So, most accountants leave it to specialists who understand the technical nature of research and development.
R&D consultants still work with accountants to include the R&D Tax Incentive schedule into the Income Tax Return.
So, you keep your accountant, we just do the R&D bit.
What are some of the complexities?
The process on the surface looks straightforward, but there are a few technical components that make for a good application.
- Legal R&D definitions
- Government interpretation of the R&D act
- Analysis of the company technical information
- Drafting experimental plans
- R&D interview process
- Creating R&D budgets
Do you need a consultant?
Legal R&D Definitions
As with every field dealing directly with the government, there is set legislation to work within.
The R&D Incentive is no different.
The scientific method is outlined in very defined terms in the legislation, which is a fairly accurate representation of the method used academically.