On 12th March 2020, Noah attended a State Reference Group (SRG), an industry event co-chaired by AusIndustry and the ATO, for which Noah is a foundation member and regular participant.
The SRG is a stakeholder forum where the tax advisors meet to discuss insights on operational issues surrounding the R&D Tax Incentive. The feedback from the SRG is then used to inform national-level, Roundtable discussions regarding program administration. For a complete list of meeting minutes visit, business.gov.au/program-news-and-updates.
Here follows some key points discussed at the most recent SRG
Integrity Framework User Journey
Much of the discussion focused on an updated ‘Integrity Framework User Journey’ guide:
Source: https://www.business.gov.au/-/media/Grants-and-programs/RDTI/RDTI-Integrity-Framework–Detailed-user-journey.pdf
The current User Journey Guide helps you to navigate the steps along your journey and possible issues you may experience, including if you are selected for a review.
Source: https://www.business.gov.au/-/media/Grants-and-programs/RDTI/RDTI-Integrity-Framework–The-framework.pdf
The updated User Journey Guide will place focus on education and guidance for registrants, as requested by the Department of Industry, Innovation and Science (DIIS). Particular emphasis will be placed on increasing face-to-face engagement with companies and transparency throughout the eligibility exam, which is encouraging to see.
As the program is based on self-assessment this update is great news – particularly for first time registrants who need assistance navigating the program and understanding its requirements.
A New R&D Registration Portal
Also coming down the pipeline is a new R&D registration portal. The new R&D registration portal will be web-based and assessed online. It will feature more plain English language and a simplified question structure aimed to guide businesses to provide information required.
A Refreshed ‘Guide To Interpretation’
The ‘Guide To Interpretation’ is a fulsome document that sets out how AusIndustry interprets key elements of the definition of ‘R&D Activities’. The current guide issued in 2016 can be found here.
However, now in discussion is an updated ‘Guide To Interpretation’ that will help assist companies of all sizes, across all sectors to understand and assess whether their work is eligible for the R&D Tax Incentive.
Industry Statistics Discussed
Below is a list of some interesting claim stats we came across:
| Statistic | Detail |
| SMEs make up the vast majority of companies registering for the R&D Tax Incentive, but large companies tend to spend more | Approximately 80% of registrants of the total 14,231 registrants are SMEs, compared to the 20% of registrants that are large businesses. However, large businesses account for 52% of R&D expenditure under the program |
| SMEs make up the vast majority of companies registering for the R&D Tax Incentive, but large companies tend to spend more |
|
| The top three fields of research account for 91.0% of all R&D expenditure | Engineering is the highest at $4.5bn, then Information, Computing and Communication Sciences at $4.0bn and Medical & Health Services at $1.2bn |
| Professional, Scientific and Technical Services accounts for 44.2% of registrations in the Services Sector | |
| New South Wales, Victoria and Queensland account for the majority of registrations
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Summary
Overall, it’s fantastic to note the R&D Tax Incentive Roundtable is taking on our continued feedback regarding the need for transparency, clarity and engagement with applicants. An incredibly valuable program that drives economic growth and productivity, successful applicants can claim up to 43.5% refund for undertaking ‘R&D Activities’. It’s therefore vital that businesses understand the program and believe they can successfully claim through a supportive process.
If you’d like help registering for the R&D Tax Incentive for R&D Activities carried out last financial year (1 July 2018 to 30 June 2019) the 30th April registration deadline is now extended to 30 September 2020. For professional, competent assistance on the claims process, contact the Noah Connect team.
