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What Records Are Needed for R&D Tax Incentive?

The R&D Tax Incentive is for businesses conducting innovation and developing new products or services. It’s a self-assessment as part of your application for the rebate. Therefore, you will need records that substantiate your claim. By records, we mean detailed documents and evidence that will satisfy the Government’s requirements. These requirements are stringent and very specific.

The company must maintain adequate records to prove to AusIndustry and the ATO:

  • That they carry out qualified R&D activities (i.e., core R&D activities and ancillary R&D activities);
  • They incur eligible expenditure in respect of the activity 1; and
  • Their R&D activities and expenditures meet all other legislative requirements under the Program, such as generating new knowledge and having a scientifically expressed Hypothesis
  • Information about how the R&D fits into a Product Strategy
  • That is conducted as a proper R&D Project with budgets and timelines
  • Comprehensive planning of experiments and tests to be conducted to prove or disprove the hypothesis
  • Periodic review of progress and experiment results to adjust and pivot the Hypothesis

As you can see the relevant expense records include those normally kept supporting income tax returns. But you need to add to those detailed documentation relating to the planning and progress of research and development activities. The records maintained by individual claimants will vary according to the nature of their business and their research and development activities.

To make sure you have all records in place, we can help you optimise your record-keeping process. Take a look at our Online Courses, you will find all relevant knowledge and templates about how to enhance your record-keeping process and how to increase your tax benefits. This is a great head start for your team so they don’t have reinvent the wheel.

We can help you to determine whether you are on the right track by doing a Self Audit questionnaire, you can complete and receive a personal report written by our consultants. Complete it here.

Also, we highly recommend our Instructor-Led Training Courses, one of our instructors can provide personalised and comprehensive Training and Workshops for you and your team. Check it out

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