Like it or not, you really do need to trust your R&D Tax Incentive consultant.This post explorers what you are trusting them to do for you.
It is amazing how claimants seem to have blind faith in their R&D Tax Incentive consultant. For some, they don’t have time to think about their R&D application, so it’s the easy way out. Others are concerned but convince themselves that the consultant is the expert in the R&D tax Incentive program and leave them to it. This faith is reinforced when the promised R&D refund duly materializes.
So what is the problem?
The basic problem is that the R&D Tax Incentive is a self-assessment program – the claimant is responsible for checking their compliance. That means you – not the consultant. AusIndustry will not typically look at the application too closely when you submit it, will register your R&D and will issue you your registration number. The Australian Taxation Office will normally defer to AusIndustry regards the technical eligibility of the R&D claim. So, provided that the R&D Tax Schedule submitted to the ATO has been prepared competently, the tax refund or credit will be issued.
R&D Tax Incentive is a Self-Assessment Program
As with any Government self-assessment program, the R&D Tax Incentive relies on ‘spot’ checks (reviews) for regulation. Sometimes these reviews are targeted, or they can be random. If your consultant has had issues with AusIndustry applications in the past, they may be more likely to be picked for future reviews. For this reason when choosing an R&D Tax Incentive consultant, always ask how many AusIndustry reviews they have had, and whether they were successful.
For this reason, there is always a temptation for the consultant to minimize the effort and the care they put into the AusIndustry application, because they know it is unlikely that the application will be closely scrutinized. They are playing the odds. This is where the trust comes in – you want a consultant that does a competent job on the applicant in first place. You don’t want to be the unlucky client who is picked out for a review.
The AusIndustry Review
It is always a good idea to avoid AusIndustry reviews if possible. At the very least they will take up some of your time (and money). Random reviews can always happen, even with well-written applications, but you can and should avoid targeted reviews.
If your application is well-written and your R&D is well-documented, then a review should be a matter of substantiating the claims made in the application by providing the requested documentation.
If the application was badly written (because the consultant cut corners), a review can be much more painful (and costly) for a number of reasons. The AusIndustry reviewer may well be confused about the R&D being claimed and may not even ask the right questions. Quite often, reviews can go around in circles for that reason.
If you do find yourself in an AusIndustry review, you are trusting your consultant to help you manage that review well. If a consultant was inconsiderate enough to draft a poor application in the first place, they are probably unlikely to respond well to an AusIndustry review. A reasonable consultant will be cooperative (i.e. not confrontational) with AusIndustry and will do their best to address the concerns of the reviewer.
Any number of R&D Tax Incentive consultancy services can get you an R&D tax refund or tax credit. Most however do not know what to do with an AusIndustry review.
A poor consultant can take an adversarial approach to the review, which is not good for you the client and typically doesn’t end well. A poor consultant may even just try to inundate the reviewer with documentation (any documentation) to persuade the reviewer. This is also a poor tactic. You need to be able to trust the consultant to do their best to help the AusIndustry reviewer with relevant and useful information.
Also, be aware that there is no guarantee usually that your consultant will support you in an AusIndustry review or may abandon you if the view becomes too difficult. Tech Abstract has clients who were abandoned by a previous consultant during an AusIndustry review.
How Tech Abstract can help
Tech Abstract will prepare your R&D Tax Incentive application to present your claimed R&D in a clear, concise and readily assessable format. There should be little doubt about what R&D is being claimed. Of course, we will only claim R&D activities that are eligible. This minimizes the chance of an AusIndustry review in the first place.
If there is an AusIndustry review, then Tech Abstract will make sure that we understand the nature and the context of the AusIndustry reviewer’s questions or concerns, and we will work with you to address those concerns. Our objective is always to be helpful and cooperative with the AusIndustry reviewer. Because your application would have been clearly presented, this makes it much easier and faster to resolve concerns from AusIndustry.
Our aim is to make the job of AusIndustry as easy and painless as possible. We always assume that the reviewer is just trying to establish that you have eligible R&D and is looking for confirmation of that. Our aim is always to resolve the review at the earliest stage we can.
Unless it is unavoidable, we would not progress the review to latter stages in the process, as this involves considerable additional cost and can make the review more difficult to satisfactorily resolve.
Above all else, Tech Abstract would never abandon a client in an AusIndustry review.
Finally, Tech Abstract has had very few AusIndustry reviews, and we have never had an unsuccessful review. You deserve a consultant with that track record.