The R&D Tax Incentive can provide significant tax savings, or help extend runway for a growing business. With 30 June 2026 fast approaching, now is the time to make sure your FY26 claim is being set up properly.
The records you keep, and the documentation you have on file before the end of the financial year, will directly influence the size and defensibility of your FY26 R&D claim.
Lock in your documentation before 30 June.
This is the single most important thing you can do before year end.
The ATO expects R&D activities to be documented as they happen. Contemporaneous, dated records such as notes, lab logs, sprint logs, design documents, experimental results and internal reports are much stronger than records recreated after the fact.
Good documentation should clearly show the hypothesis you were testing, the approach you took and the outcome of the work, including whether it worked or failed.
Negative results are not a problem. In fact, they can help demonstrate the experimental nature of the work. The key is showing there was a genuine technical unknown you were trying to resolve.
Sprint notes, Jira tickets, project specification reports, background research documents, GitHub commits, internal design records and test reports can all form part of your evidence base. These should be checked now, while the work is still fresh and before important details are lost.
Review your eligible activities
Not everything your team develops will qualify for the R&D Tax Incentive.
Eligible core R&D activities must involve conducting experiments where the outcome could not be known in advance based on current scientific or technical knowledge. The purpose of the work must be to generate new knowledge.
Routine development, replication of existing solutions and standard business analytics do not qualify.
Before 30 June, founders should walk through their FY26 projects and draw a clear line between work that was genuinely experimental and work that was not.
Common eligibility issues include activities that were commercially focused from the outset, rather than driven by technical unknowns, work that simply applies existing techniques to a new product and development where the technical approach or outcome was already determined before the work began.
Get your expenditure in order
You can only claim R&D expenditure that is incurred on eligible activities. This means there needs to be a clear connection between the money spent and the qualifying work, and that connection needs to be documented.
For employee costs, a time-tracking or allocation methodology is expected. For contractors, agreements need to be reviewed carefully. The at-risk rule requires your business to bear the financial risk of the R&D activity, rather than shifting that risk to the contractor.
Before 30 June, make sure you have staff time allocations for R&D activities, contractor agreements reviewed for at-risk compliance and any feedstock or clawback issues considered if your R&D activities involve producing goods or services.
You should also assess any overseas R&D expenditure to determine whether an overseas finding is required.
Check your eligibility thresholds
To access the refundable 43.5% offset, your aggregated turnover must be under $20 million for the income year.
If you are approaching that threshold, or if your corporate group structure has changed, now is the time to confirm your position. Unexpected ineligibility for the refundable offset can have a significant cash flow impact.
Understand your registration timeline
You do not register with AusIndustry until after 30 June. For FY26, the registration deadline is 30 April 2027.
Under the R&D Tax Incentive rules, companies must apply to register within 10 months of the end of the income year in which the R&D activities took place.
However, the underlying evidence needs to be in place well before then. The work to identify and scope eligible activities should start now, not midway through next year.
You can read more about the official R&DTI application timing on the business.gov.au website.
Don’t leave it to tax time
Many founders only think about the R&D Tax Incentive when their accountant asks about it after the end of the financial year.
By then, project memories have faded, team members may have moved on and information gaps are much harder to fill.
The claims that hold up under DISR and ATO review are the ones built on real-time records, not reconstructed explanations after the event.
Need help reviewing your FY26 R&D position?
If you’re planning to make an R&D Tax Incentive claim for FY26, now is the time to make sure your activities, records and expenditure are in order.
Prime Partners can help you review your eligibility, identify documentation gaps and put the right evidence in place before 30 June. Get in touch with our team to discuss your FY26 R&D claim before year end.