If your company carried out R&D activities between 1 July 2025 and 30 June 2026, it has until 30 April 2027 to register them with AusIndustry, the part of the Department of Industry, Science and Resources that administers registrations. A claim that is not registered by the deadline is lost for that year unless an extension of time has been granted, and extensions are available only in limited circumstances on application.
Two steps, in order
The R&D Tax Incentive is claimed in two stages. Registration with AusIndustry comes first and has its own deadline, and the offset is then claimed in the company tax return using the registration number.
Step 1: Register with AusIndustry by 30 April 2027
Registration is made through the customer portal within 10 months of the end of the income year, so for a company with a 30 June year end the FY2025-26 deadline is 30 April 2027. The application describes each core and supporting R&D activity, the technical uncertainty being resolved, the new knowledge the company set out to generate and why a competent professional could not have known the outcome in advance from existing knowledge.
Once the registration is processed, AusIndustry issues a registration number, which is needed to complete the R&D Tax Incentive schedule in the company tax return.
Step 2: Claim the offset in the company tax return
With the registration in place, the R&D Tax Incentive schedule is lodged with the company tax return for the year. A company that registers early can lodge its return and receive any refundable offset sooner, which matters most for a company in a loss position waiting on the cash.
What the R&D Tax Incentive is worth
Companies with aggregated turnover under $20 million
The refundable offset is the company tax rate plus 18.5 percentage points, which is 43.5 per cent of eligible R&D expenditure for a base rate entity taxed at 25 per cent. Where the offset is more than the company's tax liability, the excess is refunded in cash.
Because R&D expenditure claimed through the offset is not also deducted, the net benefit for a company that would otherwise have deducted the expenditure is the 18.5 point premium. For a company in losses with no tax to pay, the whole offset arrives as a refund.
| Eligible R&D spend | Offset at 43.5% | Net benefit over a 25% deduction |
|---|---|---|
| $100,000 | $43,500 | $18,500 |
| $250,000 | $108,750 | $46,250 |
| $500,000 | $217,500 | $92,500 |
| $1,000,000 | $435,000 | $185,000 |
There is no dollar cap on the refundable offset under current law. A $4 million cap was proposed in a 2019 bill that was never passed.
Companies with aggregated turnover of $20 million or more
The offset is non-refundable and depends on R&D intensity, which is eligible R&D expenditure as a proportion of total expenses. The premium is 8.5 percentage points above the company tax rate on expenditure up to 2 per cent intensity and 16.5 percentage points on expenditure above it. Eligible expenditure above $150 million a year attracts the company tax rate only.
Key dates for FY2025-26 claims
| Date | Milestone |
|---|---|
| 1 July 2025 | FY2025-26 income year starts |
| 30 June 2026 | FY2025-26 income year ends |
| From 1 July 2026 | FY2025-26 activities can be registered |
| 30 April 2027 | Registration deadline for a 30 June year end |
| 30 April 2028 | Registration deadline for FY2026-27 activities |
What to have ready
A registration is only as strong as the records behind it. Before preparing it, gather the project plans, experiment logs, technical reports and test results from the year, along with timesheets or another reasonable basis for apportioning staff time, contractor agreements and invoices and the general ledger detail for the expenditure being claimed. Records made at the time the work was done carry the most weight, and the ATO expects them to be kept for five years.
The activity descriptions are what a reviewer reads first. A statement that the company developed new software tells a reviewer little, while a description that sets out the specific technical question, the hypothesis, what was tried and what was learned gives them what they need to see that the legislative test is met.
Salary should be apportioned on the time actually spent on R&D activities. Claiming the whole of an employee's salary when part of their time went to other work overstates the claim, and a review will ask for the basis of the split.
How we can help
Our R&D Tax Incentive team, part of Prime Innovation, reviews eligibility against the legislative definition, prepares the AusIndustry registration and activity descriptions, calculates and apportions the expenditure, lodges the R&D schedule with the company tax return and supports clients through any review by AusIndustry or the ATO.
Our fee is fixed and agreed before work begins, and it is not a percentage of the offset. We explain why that matters in our article on choosing an R&D adviser.
We work with R&D clients in software development, manufacturing, agriculture and pharmaceutical and biotech. To start your FY2025-26 registration, call 02 8378 2421 or contact us online.
Frequently Asked Questions
What is the deadline to register R&D activities for FY2025-26?
30 April 2027 for a company with a 30 June year end, which is 10 months after the end of the income year. Extensions of time are available only in limited circumstances and must be applied for.
What is the R&D Tax Incentive offset rate for smaller companies?
For companies with aggregated turnover under $20 million, the refundable offset is the company tax rate plus 18.5 percentage points, which is 43.5 per cent of eligible expenditure for a company taxed at 25 per cent.
What happens if I miss the 30 April 2027 deadline?
Unless an extension of time has been granted, the company cannot claim the R&D Tax Incentive for its FY2025-26 activities.
Is registration the same as claiming the offset in my tax return?
No. The company registers with AusIndustry first and receives a registration number, then uses it in the R&D Tax Incentive schedule lodged with the company tax return. Both steps are required.
Is the refundable R&D offset capped?
No. Under current law there is no dollar cap on the refundable offset. A $4 million cap was proposed in a 2019 bill that lapsed without becoming law.
Does Prime Partners charge a percentage of the R&D refund?
No. We charge a fixed fee agreed before work begins.
What documentation do I need for an R&D claim?
Records made at the time the R&D was done, such as project plans, experiment logs, technical reports and timesheets, together with evidence of the expenditure claimed. Keep them for at least five years.
