Lets review Propel Ventures as an R&D Tax Incentive example. What if your entire business is to innovate and look for the new opportunities by doing things differently. And what if you are doing this on behalf of other companies. The responsibility to get it right is hefty.
Propel Ventures is one of those companies fill with amazingly bright and creative people. Applying their skills on behalf of other companies to bring to life new products and markets for the benefit of their clients. Their work is always ground in developing new intellectual property. Which means they routinely leverage the AusIndustry R&D Tax Incentive Grant Program on behalf of their clients. Thus to make the projects economically viable.
R&D Tax Incentive Compliance Concerns
Propel Ventures is a great R&D Tax Incentive example. When Propel heard the rumours that “software claims are being rejected” by the ATO under the R&D Tax Grant scheme, they paid attention. Their investigations will lead them to us and then a better understanding of why these claims are being rejected.
One of the key errors that often happens with R&D projects in software development. It is an assumption that their entire ‘whole project’ will be claiming on the basis that their “Agile development is a Scientific Process”.
This is not the case, in contrast, it will lead to Propel engaging with SoftLogic Solutions. To put in place a rigorous process for clearly identifying the Core R&D and New Knowledge they are generating. Therefore, it would be the foundation for a sound claim for their R&D costs. This meant that they will need to:
- Empower their team with the knowledge they need to be able to confidently identify new knowledge. What would be their ‘core R&D’ going forward for current and new projects?
- Revise their current ‘agile’ development processes. To include relevant steps to assess and document new knowledge and what comprises ‘core R&D’.
- Put in place new steps to document in a ‘scientifically acceptable’ way. To ensure they are compliant for the ATO grant requirements.
How should we work with Propel Ventures
SoftLogic apply their 6 Step Framework working closely with the Propel team to:
- Prepare one of their projects as an R&D Tax Incentive example with all the right documentation so that they could replicate this for new projects.
- Develop the additional processes need. Determine how best to incorporate these into their existing agile development process.
- Capture these processes into a R&D Process Manual that is now their bible for every project. Making sure that they now have a repeatable and robust approach for their projects, each with a sound basis for their R&D claims, fully support with the correct and compliant documentation.
- Review and audit their current projects to align with the new processes.
Educate and help to develop a sound working knowledge within their team. So that everyone is well versed in how to tackle their projects. To maximise their R&D claims and keep them compliant.
The key outcome for Propel Ventures was a surety that all their projects have R&D considerations built into the development phase from beginning to end. Together with all the right documentation and compliant record-keeping in place. Conversely, the benefits are far more. They now have a repeatable and robust process. This will be the heart of their processes which is now a ‘marketable’ strength. Hence, they can add to their offering when working with clients.
If you are in software development and working under the R&D Tax Grant Scheme, don’t assume. An agile methodology provides you with the necessary scientific approach. It doesn’t.
Get in touch to talk about how SoftLogic Solutions can assist. Getting your R&D Projects soundly documented to keep your claims from being rejected by the ATO or failing during an audit.