A claim has to satisfy AusIndustry on the science and the ATO on the numbers. As your R&D tax consultant, we take care of both, and stand behind the claim if either one asks questions.
Prime Innovation is the R&D tax incentive consulting practice of Prime Partners, chartered accountants in North Sydney and Orange. We work with mid-market groups claiming the non-refundable offset, growing companies under $20 million turnover claiming the refundable one, and founders making their first claim, in software, manufacturing, agriculture, life sciences and engineering across Australia. Every engagement is on a fixed fee agreed before the work starts, never a percentage of your refund.
The Research and Development Tax Incentive is the Australian Government's flagship program for encouraging business innovation, administered jointly by AusIndustry and the ATO. If your company meets the eligibility criteria and conducts qualifying R&D activities, you are entitled to claim the offset. No application is assessed on merit, the entitlement follows from eligibility. We charge a fixed fee for the work, which the ATO views as lower-risk than the contingency arrangements some advisers use.
An R&D tax incentive consultant works out which of your activities the law treats as R&D, proves it, registers it and turns it into a number in your company tax return. Most of the value sits in the first two steps, because that is where a claim is won or lost if anyone looks at it later.
The offset you can claim, and most of the work involved, depends on the size of the group behind the company.
Groups with aggregated turnover of $20 million or more claim the non-refundable offset, with a premium set by R&D intensity. The work is in grouping connected and affiliated entities, apportioning expenditure across them, and producing a claim the board and the auditor are as comfortable with as AusIndustry.
Aggregated turnover under $20 million, and not controlled by income tax exempt entities, gives the refundable offset. A company in tax losses receives it as cash, which is why the timing of registration and lodgement matters to cash flow.
A first claim is the right moment to set up records properly. We build the documentation into how your team already works, so later and larger claims rest on a solid base.
Larger claims bring more to manage: several projects running across income years, R&D done by related entities or overseas, contracted research and expenditure that has to be split between R&D and production. We advise on overseas findings, which are needed before overseas R&D expenditure can be claimed, and on advance findings, which give assurance on eligibility before you rely on it. We also look at how the offset sits with your tax losses, franking account and group structure.
An Australian incorporated company, or a foreign corporation that is an Australian resident for tax purposes. Trusts, partnerships and sole traders are not eligible to claim directly.
Experimental work where the outcome cannot be known in advance. Core R&D activities must follow a systematic progression of work from hypothesis to experiment, observation, evaluation and logical conclusions, and supporting R&D activities must be directly related to them.
Employee wages, contractor payments, materials, software and depreciation on assets used for R&D. You generally need to spend at least $20,000, unless the R&D is done by a registered research service provider or you contribute to the Cooperative Research Centres Program.
The rates and structure depend on your aggregated turnover, which includes the turnover of connected and affiliated entities. To run your own numbers, use our R&D tax incentive calculator.
| Component | Rate |
|---|---|
| Company tax rate (base deduction) | 25% |
| R&D premium | +18.5% |
| Total R&D tax offset | 43.5% |
The table assumes a base rate entity paying company tax at 25 percent. A company taxed at 30 percent gets 48.5 percent. The offset is refundable, so a company in a tax loss position receives it as a cash refund from the ATO, which is particularly valuable for startups and companies reinvesting heavily in development.
| Eligible R&D spend | Profitable, net benefit at 18.5% | In losses, cash refund at 43.5% |
|---|---|---|
| $100,000 | $18,500 | $43,500 |
| $250,000 | $46,250 | $108,750 |
| $500,000 | $92,500 | $217,500 |
| $1,000,000 | $185,000 | $435,000 |
| $2,000,000 | $370,000 | $870,000 |
For a profitable company the net benefit is the 18.5 percent premium above the standard 25 percent deduction it would receive regardless. For a company in losses, the full 43.5 percent is received as cash, since the base deduction has no current value when there is no taxable income to offset.
| R&D intensity | Offset rate |
|---|---|
| Up to 2% of total expenditure | Company tax rate + 8.5% |
| Above 2% of total expenditure | Company tax rate + 16.5% |
R&D intensity is your notional R&D expenditure as a share of total expenditure for the income year. The 8.5 percent premium applies to R&D spending up to 2 percent of total expenditure and the 16.5 percent premium to the part above it, so a company taxed at 30 percent gets 38.5 percent on the first tier and 46.5 percent on the second. An unused non-refundable offset can be carried forward to a later year if it meets the carry forward rules.
For every company, the premium applies to notional R&D deductions of up to $150 million in an income year. Anything above that earns only the company tax rate.
Technical knowledge combined with tax and accounting expertise, so claims are accurate, compliant and maximised within regulatory boundaries.
As R&D activity scales, many innovation-led businesses also draw on business structuring and review to keep new IP within an appropriate corporate structure, growth and expansion advisory for financial modelling and board reporting, and the Finance Hub to track R&D expenditure in real time via Xero and integrated tools. Where relevant we also help identify innovation grants that complement R&D claims, including Export Market Development Grants, the Industry Growth Program, the Medical Research Future Fund, state-based programs and Cooperative Research Centres. Grant programs change frequently, so contact us for current programs relevant to your business.
We see eligible work right across the industries we support, and each has its own page in our industries directory.
SaaS development, AI and machine learning, cybersecurity, cloud infrastructure, mobile and web applications.
Product design, process automation, materials testing, advanced manufacturing and quality control innovation.
Precision agriculture, crop science, sustainable farming, livestock management and agricultural IoT systems.
New construction methods, energy efficiency, BIM innovation, prefabrication and structural engineering R&D.
Medical device development, clinical software, diagnostic tools, telehealth and health data analytics.
Product formulation, food safety innovation, packaging R&D, extraction technology and mine automation.
A specialist R&D firm knows the eligibility rules and the registration but usually hands the numbers to your accountant. A general accountant knows your tax position but may not prepare R&D registrations often enough to know where AusIndustry draws its lines. The gaps between the two are where claims go wrong.
Judgement on which activities are core and supporting R&D, activity descriptions written the way AusIndustry assesses them, records that show the systematic progression of work, and experience of what reviewers ask for.
Aggregated turnover and grouping, the apportionment of wages and overheads, the R&D schedule in the company tax return, and how the offset interacts with losses, franking and the rest of your tax position.
Prime Partners is a chartered accounting firm with its own R&D tax incentive practice, so one team handles both halves. If you already have an accountant you are happy with, we work alongside them on the R&D claim and leave the rest of the relationship where it is. Our guide on choosing an R&D tax incentive adviser covers the questions worth asking any firm.
The department behind AusIndustry and the ATO can both review the activities in a claim, before or after registration. AusIndustry looks at whether the activities are eligible R&D. The ATO looks at the entity, the expenditure and the offset, and can hold a refund while it checks a claim, telling you within 30 days of lodgment if it has. Software development and claims prepared on contingency fees attract particular attention.
For the detail, read what happens when AusIndustry reviews a claim.
We quote each engagement after the first eligibility conversation, because the work varies far more than the size of the refund does. The fee reflects the number and complexity of the R&D projects, the state of your existing records, how many entities sit in the group, whether R&D happens overseas or through related parties, and whether we are also preparing your company tax return. A first claim usually takes more work than a repeat one. Tell us about your R&D program and we will quote for it.
We charge a fixed fee for R&D advisory and claim preparation. We do not charge a percentage of your refund or offset, and that distinction matters. The ATO has publicly identified contingency-fee arrangements as a compliance risk factor, and in its 2025-26 compliance priorities it specifically flags advisers who charge on a contingency basis as attracting increased scrutiny, noting such arrangements can indicate a refund claim is at higher risk of being incorrect.
Our fee is the same whether your eligible expenditure is $200,000 or $2 million.
We focus on building a defensible claim that withstands ATO and AusIndustry review.
You know what you are paying before we begin, not after you receive your offset.
Fixed-fee claims are less likely to attract ATO review than contingency-based claims.
The Federal Court has imposed penalties exceeding $36 million across recent promoter penalty cases involving inflated R&D claims, and in every case the taxpayer, not just the adviser, was liable for the shortfall, penalties and interest. As Chartered Accountants Australia and New Zealand members, we are bound by professional standards that prioritise accuracy and compliance over commercial incentives. For more, read our guide on how to choose an R&D Tax Incentive adviser.
Backed by Prime Partners, your R&D claim integrates with your broader tax strategy rather than being prepared in isolation by a standalone R&D firm. Our team works across both.
Our consultants understand both the AusIndustry eligibility criteria and the commercial realities of running an innovative business.
From eligibility assessment through to ATO lodgement and review defence, with no handoffs and no gaps between R&D advisers and your accountant.
The four questions almost everybody arrives with, in the order they usually get asked.
Where the line falls in the four sectors the questions come from most.
The R&D Tax Incentive is one of several an innovative Australian company can reach.
Whether this is your first claim or your tenth, we can assess your eligibility, give you an indication of the potential benefit and quote a fixed fee for the work.
Contact Prime Innovation→Once a month we send our latest thinking on tax, business, and the moments that shape a year. Practical, considered, and written for people who would rather understand the why than chase the headline.
