The checklist
Eight things to settle, from the start of the year to the board.
Most of what decides a large claim is settled early, while the work is happening. Left to the end of the year, the records are harder to rebuild and the decisions have already been made.
1
Know the group
List every connected and affiliated company, in Australia and overseas. Confirm aggregated turnover, which offset applies, and whether the company is a base rate entity paying 25 per cent.
2
Name the program
The projects, the core and supporting activities in each, and when they start. Check nothing falls in an exclusion, such as software for internal administration or the new gambling and tobacco exclusions.
3
Record as the work happens
The hypothesis before each experiment, the results as they come in and the decisions made because of them. Time records that split R&D from other work, and contractor scopes that say what was done.
4
Set up the money
A cost centre or project code for R&D. A basis for apportioning overheads, depreciation and shared staff. Payments to associates claimed only once paid. Any grants identified, because they can reduce the claim.
5
Work out the intensity
Notional R&D deductions divided by total expenses for the year, against the 2 per cent threshold. Check the total expenses figure and that every R&D cost is in the claim.
6
Settle the findings
An overseas finding lodged before the end of the year the overseas work is done, which is not available to a foreign-owned company. An advance finding where the board will rely on the offset.
7
Diary the dates
Registration with AusIndustry within ten months of the year end: 30 April for a 30 June year, 31 October for a 31 December year. Then the R&D schedule in the company tax return.
8
Brief the auditor and the board
Agree the accounting treatment of the offset with the auditor before year end. Give the board a short summary of what is claimed, why it qualifies, the evidence behind it and the risk if it is reviewed.
The same checklist is a one-page PDF, to print or attach to a board paper.
