R&D Tax Incentive Transparency Report Insights
The recent release of the R&D Tax Incentive (R&DTI) data for the 2021-22 financial year offers a comprehensive snapshot of the R&D Tax Incentive and provides a breakdown of amounts spent by individual claimants, industries, and small and large businesses.
Small Businesses Heavily Engaged in R&D
While public and multinational corporations made substantial R&D investments, small businesses were a driving force, accounting for over 5,500 claims of the 11,000 total claims.
- Small Businesses: $2.2 billion
- Privately Owned and Wealthy Groups: $4.1 billion
- Public and Multinational Businesses: $4.9 billion
Top Industries for R&D
The professional, scientific, and technical services industry emerged as the leader in R&D investment making up 43% of all claims, and a total spend of $4.6 Billion. Other industries which made substantial investment in R&D include manufacturing, wholesale trade, information media and telecommunications, and financial and insurance services.
Compliance and Enforcement
The report included discussion on the compliance approach of the ATO and the Department of Industry, Science and Research, and their focus on identifying non-compliance in larger businesses and high-expenditure claims. While the report didn’t delve into specific compliance issues, it highlighted the importance of taxpayer alerts TA 2023/4 and TA 2023/5. These alerts focus on inappropriate R&DTI claims and provide guidance for avoiding non-compliance.
Key Takeaways
The publication of R&DTI claim data signifies a shift towards greater transparency in program administration.
Fullstack Advisory can help you understand the R&D Tax Incentive program and help you towards best practice. Contact us today to discuss your specific needs.
