Review of the R&D Tax Incentive (December 2019) by Small Business Ombudsman, Kate Carnell's: BDO Comment

16 December 2019

The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, has outlined a suite of reforms to the administration of the Research and Development Tax Incentive (R&DTI), as part of a comprehensive report which makes 24 detailed recommendations.

BDO Australia R&D Tax Partner, Nicola Purser said: “The Small Business Ombudsman’s findings align with BDO’s experience regarding the concerns of many small companies and particularly start-up business claimants.

“The report recognised that the administrative deficiencies of the program have made it overly complex, with companies being misled as to the proper means of assessing R&D activity and expenditure eligibility, sometimes resulting in retrospective assessments dating back over several years.

“The Ombudsman has highlighted the need for administrative clarity as to legislative interpretation, particularly in the proper assessment of software development claims, along with the need for better education of AusIndustry and the ATO and the adoption of a more practical approach to their administrative role.

“The changes recommended by the report are sensible and match the purpose of the R&D Tax Incentive – to incentivise companies to undertake R&D activities in Australia.

“These reforms should be implemented as soon as possible to provide companies with reassurance when making their investment decisions, and certainty on the administration of the program.”

For more information visit www.asbfeo.gov.au/news/news-articles/ombudsman-recommends-sweeping-changes-rd-tax-incentive-administration