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.


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