Early 2019, Ultimate Vision was unable to produce documentation within 30 days of a request from AusIndustry, to back up their R&D Tax Claim. They referred the matter to the Administrative Appeals Tribunal.
The Tribunal recently found that Ultimate Vision failed to have any documentation explaining their choice of Core R&D Activities and records of how they carried out and verified their R&D.
Their Activity was “UV1001: Design and Development of an Integrated Health and Fitness program and Cloud based Decision Support Systems”
Unfortunately, throughout the review process, they failed to substantiate the Core R&D as being experimental. They were unable to produce any documentation to show that the R&D was actually performed and what it cost. The Tribunal supported the ATO and AusIndustry position that applicants should have kept accurate evidence of claimed R&D activities that they registered with the R&D Tax Incentive.
The critical aspects of the Tribunal’s decision are:
- Applicants must demonstrate evidence that claimed activities were actually undertaken, and that they met the eligibility criteria;
- Applicants cannot seek to change their Activities or write the required document at the Tribunal – they are constrained to the activity descriptions as registered and documentation produced when they conducted the R&D.
- Pursuing an innovative idea will not, on its own satisfy the requirements for an eligible R&D activity, without adequately setting out the eligibility and experimental nature of the R&D.
The matter has been referred to the Federal Court on appeal and is on-going.
Read more about it here Ultimate Vision Inventions