TaxTrex
TaxTrex

Tips to maximise your R&D tax claim

Only businesses incorporated as a company can claim. If you are doing R&D in a trust, partnership or as a sole trader you won’t be able to claim your additional 15% or 45% benefit – decide whether it’s worth setting up a company instead.

Structure your entity correctly

Productivity

Gather supporting documentation that will substantiate your claim

The legislation requires claimants to substantiate the process of R&D with supporting documents. Businesses must ensure technical records are collated and referenced to timesheets for each of the employees or contractors involved in R&D activities. It is also recommended that entities conduct claim health checks through thr process to ensure nothing has been missed. Some simply questions to ask include:

  • Are my activities eligible R&D for the Incentive?
  • What is eligible R&D expenditure?
  • What records link the activity and expenditure?
  • What records are needed to prove I’ve used the scientific method?
  • What is involved in putting the claim together?

Don’t exclude R&D conducted overseas

You can claim this expenditure that is conducted overseas under the R&D Tax Incentive program if:

  • The R&D has a significant scientific link to Australian based core activities, and
  • The overseas expenditure is less than half of the total project expenditure (Australian plus overseas), and
  • You lodge an Advanced Finding application prior to 30 June 2014. If granted, this will ensure related expenditure is eligible for the R&D Tax Incentive for the current and next two income years.

The ATO reports the highest error rates for R&D claims are made by accountants that lodge less than five claims a year.

82% of accountants think that preparing R&D claims without specialist help is too risky. TaxTrex has been designed by Swanson Reed to cut through the complexity and take the pain out of the claim process.

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