14 Apr 15 Getting R&D claims right
The ATO advises that it is working closely with AusIndustry to identify taxpayers, tax agents and consultants who may be involved in aggressive Research and Development (R&D) arrangements. The ATO will be taking a co-ordinated approach to address these behaviours.
The ATO is concerned that these arrangements:
- are inconsistent with the requirements of the R&D regime
- may have features of tax avoidance arrangements
- may be fraudulent.
In some cases the activities of these consultants may attract the operation of the promoter penalty laws.
To ensure details in the R&D schedules and claims for R&D expenditure are correct, the ATO requests that tax agents:
- verify with clients that their claims are attributed to activities consistent with their AusIndustry Registrations, and expenses (for example labour costs) were actually incurred on R&D activities
- tell the ATO if they are approached by an R&D consultant to lodge R&D schedules on behalf of taxpayers, who are not clients, and where the consultant is not prepared to reconcile or substantiate the information in the R&D schedule
- come across claims that appear to be disproportionate when compared to a taxpayer’s normal business activity.