Using an External Consultant
It might seem obvious, but you should review your R&D Tax Incentive application, before it is submitted.
Companies engage an external consultant for a variety of reasons. The R&DTI requirements are a little involved and difficult to master, so this one very good reason to hire a specialist R&D Tax Incentive consultant. Compounding this is often a lack of time. Small business owners in particular are very time poor. They are already juggling many things in their business. They really don’t want to spend the time to understand the R&DTI program requirements.
They may know enough to appreciate that the R&DTI is a valuable source of funds for their R&D activities, and hence engage an external consultant to prepare and submit their application.
A knowledgeable and resourceful R&D Tax Incentive consultant should be able to prepare and submit an effective and eligible application whilst minimising the time investment required from the company.
Review your R&D Tax Incentive Application
However, that doesn’t mean that the time investment from the company drops to zero. Far from it. One area where this mis-conception pops up is reviewing the draft R&D Tax Incentive application before it is submitted.
Few companies take the time to properly review their application before it is submitted by the consultant, even though the company (not the consultant) is responsible for the accuracy of the application.
A diligent consultant will go out of their way to make sure they have understood their client’s R&D and have explained it well. If the consultant has solid technical skills and industry R&D experience themselves, then they may well have achieved that.
Understand your relationship with your consultant
However, it is foolish to assume that this is always the case. You need to understand what sort of relationship you have with your consultant – can you really take a ‘hands-off’ approach to the application, or do you need to actually manage the application? Does the consultant really have the skills to draft the application with minimal input from you? Even the best consultants will struggle with insufficient technical information from you.
Many (probably most) R&D Tax Incentive consultancies are accounting firms. Their speciality is accounts, not technology. You need to remember that. Hence, whilst the ATO Tax Schedule for the R&DTI application may be fine, the technical application to AusIndustry may not be.
If this is the sort of consultant you have, you really have to manage them and review the AusIndustry application carefully yourself. Citing lack of time is cold comfort when AusIndustry rejects the application because it is poorly drafted. Since the R&DTI is a self-assessment entitlement, this rejection may only happen some years later, exposing you to up to 5 years-worth of applications that may be called into question.
What you can expect from your consultant
The consultant’s commitment to you may only last as long as it takes you to get your refund, and the consultant to get their fee. Again, a good consultant will support you if there is an AusIndustry (or ATO) review.
If you are lucky enough to have an R&D Tax Incentive consultant who really does understand your R&D (up to a point), and can write a clear and concise description, your time commitment should be less, and your confidence higher.
This makes it well-worth taking to the time find an R&D Tax Incentive consultant who is technically trained and has industry R&D experience.
How we can help
Tech Abstract only employs staff with STEM (Science, Technology, Engineering and Math) skills, and extensive industry R&D experience. Moreover, we proactively manage the application on your behalf, making sure that we have the technical explanation correct.
We take the time to make sure that we understand your R&D and that our explanation of your claimed R&D is clear and accurate.