KPMG has recently become aware of regulator activity from the Australian Taxation Office (ATO) in relation to the Research and Development (R&D) Tax Incentive, with the ATO and AusIndustry working together on joint management of the incentive. The ATO has communicated their support of businesses undertaking genuine R&D activities. However, the ATO has expressed concerns regarding the merit of some claims, with a focus on the refundable R&D tax offset.
A recent review of the tax returns of a number of companies, undertaken by the ATO, identified several R&D claims that have been improperly made. Examples of the problems identified by the ATO include the following:
Concerns around the provision of R&D consultancy services by particular advisors have also been raised. These concerns with consultant behaviour could potentially lead to an increased risk profile depending on the reputation and previous experience of the adviser you have engaged.
If you have concerns regarding any of the risk areas identified above, or general questions relating to an R&D Tax claim, please contact a member of KPMG’s specialist R&D Tax Incentives team.