There are current reports that the Government clawed back $200 million in the 2018 financial year from businesses who have claimed the R&D tax incentive. A number of complaints regarding this action by the Australian Taxation Office (ATO) have been heard; sourced from small businesses.
They are insisting that there is inequitable treatment in relation to their claims for R&D through the ATO and AusIndustry. The key concern are Audits from several years ago, which have led the ATO to demand that businesses repay the R&D Tax Incentive, with a severe penalty often applied if they do not comply.
The principal problem here, is that the majority of the businesses have already reinvested their refunded monies arising from the R&D tax incentive. Further, it is concerning that these businesses had genuine belief that their R&D claims were justified, when according to the ATO, they supposedly were not. While the ATO’s view of the R&D Tax Incentive appears to be narrowing, it is vital that the scheme fulfil the purpose of the legislation, which is to incentivise small businesses to invest in R&D.
The Government needs to support investment in science and new knowledge to drive growth and innovation.
If you are in this position or think you may be in this position, you are welcome to contact our team of experienced taxation and commercial lawyers by clicking here to submit an online enquiry form or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange a teleconference or appointment.