Introduction
AusIndustry is in the process of rolling out a new online R&D Tax Incentive portal which you will use to submit all FY2021 R&D Tax Incentive applications. This portal replaces the PDF smart form previously used. This portal is now live, and you can prepare your FY2021 application using this portal, but you cannot submit your FY2021 application until July 5.
Getting started with the online R&D Tax Incentive portal
To access the new portal, you will need a MyGovID. This is an App that you download to your smart device. Note that MyGovID is not the same as MyGov. If you do not currently have the MyGovID App, setting that up is your first step.
Before you can use the portal for the R&DTI, the principal authority at the applicant company must do some setting up – see Setup. Assuming that you have your MyGovID, you need to link your company’s ABN to your MyGovID by contacting the ATO. You also need to log into the ATO’s Relationship Authorisation Manager (RAM) and give yourself the authority to act on behalf of your business in the R&DTI portal. Other steps are needed to authorise your staff and your R&DTI consultant to use your R&DTI portal login.
To get started with the new R&DTI portal, study the guidance on this Australian Government website: New R&DTI portal.
What’s new in the online R&D Tax Incentive portal
Whilst there are no changes to the R&D Tax Incentive requirements or the underlying legislation, there are differences from the PDF Smart form that applicants need to be aware of.
Applicants will be (or should be) aware that R&D Tax Incentive applications have always required information that demonstrates compliance with the following aspects of the R&D Tax Incentive:
- How you determined that the required knowledge was not available without the experiment performed.
- Your hypothesis (theory, proposition)
- The experiment you conducted to test the hypothesis
- How you evaluated the results of the experiment
- What conclusions were reached as a result of that evaluation
In the current PDF-based R&DTI smart form, each R&D Core Activity is free-form, so the responses to the topics above are ‘merged’ into one overall narrative for each Core Activity, which is limited to 3,000 characters.
In the new online R&DTI portal, the narrative for each Core Activity is split up into separate questions for each of the above five topics. This means that any deficiency in explaining any of these topics will be much more obvious, which is no doubt the intention. Many applicants are light on in some of these topics, especially knowledge searching and hypothesis development. In FY2021, you will need something compelling to say about these topics. If you don’t, you are increasing the chances of a review by AusIndustry.
Each response to most of the above topics also has a 4,000 character limit, so there is an opportunity for a complete explanation.
Supporting evidence
Even with the current (PDF-based) R&DTI application process, you are expected to have supporting documentation (evidence) to justify your application if needed in a review. The new R&DTI portal makes this more explicit and more obvious where you have inadequate evidence.
The new R&DTI portal will ask you what type of supporting evidence you have. Basically, AusIndustry is looking for you to indicate which of the five topics above you have supporting evidence for. You are not expected to provide that evidence with your application, however. One of the multiple-choice options for this question is that you do not have supporting evidence. It is highly undesirable to choose this option, for obvious reasons – a review is almost guaranteed.
TechAbstract R&D Tax Incentive
TechAbstract R&D Tax Incentive is a specialist R&D Tax Incentive service specializing in small to medium-sized businesses.
TechAbstract was involved in the beta trial for this new R&DTI portal earlier in 2021 and can provide comprehensive guidance on this new R&DTI portal and preparing compliant applications when using this portal.