Part 01

Unpack the R&D Idea or Project

As a first step we will explore the following with you:

1. Fully understand the idea or project – will it create new knowledge or new or improved processes, services or goods
2. Identify the uncertainties that will be investigated by the R&D project:
   • What research is out there?
   • Is there any existing IP?
   • Are there any similar technological developments?
   • Are there any experts who could easily solve this problem?
3. High level review your R&D practices.
   • Is there a systematic approach?
4. Outline any missing gaps – a pathway to application completion
5. High-level R&D roadmap for your R&D project(s)
6. Recommendations (including any insights outside of application requirements)

Doing this work up front serves two purposes. It positions your business to take full advantage of the R&D Tax Incentive, but more importantly, it helps set up your project(s) for success

Enrolment + Application

If the assessment is positive, from the 2021 income year, we will enrol your business with DST and apply for Pre-Approval before you file your income tax return and R&D supplementary return. Your application for Pre-Approval must happen at least 6 months before Income Tax Return is submitted.

Part 02

Timing of General Approval (2021 income year onwards)

You can apply for Pre- Approval only once there is a reasonable chance that your project is eligible for the R&D Tax Incentive. The earlier, the better in terms of having approval certainty before you start spending more on R&D.

However, you must have a reasonable degree of certainty around your project scope and process when you file your application. Because, if there are material changes afterwards, you will have to apply for an amendment to your approved R&D project.

Depending on the complexity of your project, circumstances around eligibility, the projects may require a review through a regulatory and commercial lens to establish more certainty for the R&D Tax Incentive program.  In our experience, a broader commercial lens will inform your intended R&D project and could lead to necessary tweaks and changes.

You’re pre-approved.

Keep recording.

RECORD KEEPING

Being pre-approved isn’t the end of the story. During your R&D project you will need to keep a good track record – to convert the pre-approval into a compliant claim with successful R&D activities.

After pre-approval, the lion share of the work involved in claiming your tax credit will lie with your accountant. There are some essential general record keeping requirements they will need. Records need to be available to support that:

• the R&D activity is eligible and within the scope of the approved project
• your R&D expenditure, core and support is eligible.

If you comply with the criteria, this is what you’ll need to show:

1. Contemporaneous records

Your standard project documentation should be used as much as possible to capture the required information.

Progress must be recorded throughout the year (not at the last minute). This includes project scope and cost as well as results, risks and increasing knowledge.

2. Report on your progress

• Regular reporting on the R&D program
• Track to key milestones and outcomes

You will need to have great record keeping. All process must be recorded throughout the year and not done haphazardly at the last minute; this also includes project scope and cost as well as results, risks and increasing knowledge.

Best practice is to be regularly reporting on the R&D program with clear milestones and decision stage-gates. This is where Vantage can really help. As experienced R&D practitioners we can do what it takes to get you ready for enrolment and, more importantly, get your R&D set up and operating for success.