How to claim the R&D tax incentive

Applying for the R&D tax incentive is not as complicated as it seems, and with an experienced R&D specialist, the process can be broken down into a number of simple steps.

If you think your project may be eligible for the R&D tax incentive, here’s a few things to keep in mind and how we can help.

R&D criteria

To be eligible for the R&D tax incentive, there are four key components that need to meet.

• Eligible entity
  You must be operating out of an Australian company (with some limited exemptions).

• Eligible core R&D activity
  You must be undertaking at least one ‘core’ R&D activity.A core R&D activity is any activity that:
  • Is experimental in nature (i.e. proceeds from hypothesis, through to experiment, through to observations, results, consultations); and
  • Is undertaken to generate new knowledge (i.e. new or improved products, processes, materials, services from that currently in the market); and
  • Outcomes cannot be known in advance (i.e. the work has a risk of failures or element of technical risk).

  If the activity is not a core R&D activity, it may qualify as a supporting R&D activity. Get in touch with our R&D specialists to learn more about this.

• Incurring eligible costs
  Your company must have spent a minimum of $20,000 on eligible R&D activities for the year.  This can include salary and wages, materials, office overheads, contractors and depreciation on R&D assets.

• Existing documentation on file
  Supporting documents must be maintained to evidence the R&D activity and the costs. Documents aren’t limited to just technical reports, it can also include photos or videos, meeting minutes, emails and informal notes describing activities or results.

Lodgment process

Once our R&D and Grants Partner reviews your business activities and confirms that your business is eligible for the R&D tax incentive, the process to claim the R&D tax refund can be quite simple. The key steps are below.

1. Review internal documentation to substantiate the claim.
2. Prepare the R&D project documentation.
3. Calculate eligible R&D expenditure.
4. Lodge the Application for Registration with AusIndustry.
5. Prepare the ATO R&D Tax Schedule.

We can also liaise with external tax agents and respond to questions from regulators (if required).

Deadlines for 2021-22 and 2022-23 financial years

If you’d like to make an R&D claim for an activity completed in 2021, the deadline is still open. The due date for 2020-21 claims is 30 April 2022.

Also, start preparing for your 2022 claims now by getting in touch with us. The R&D tax incentive is not a one-time influx of cash but a grant that you can claim more than once. If you’d like to claim the grant again, our experts would be happy to discuss your options with you.

Why Carbon?

At Carbon, we prefer a holistic approach to business. As a one-stop shop for all your financial needs, we can assure you that you will be getting the most out of your claim. We know how confusing it can be to navigate the world of R&D which is why we want to make the process as simple and painless as possible. Once your claim has been processed, our R&D and Grants specialists will keep in touch with you with any new grant opportunities. Get in touch with us to get started on your R&D claim.

Source: Australian Taxation Office