With just six weeks left in the financial year, there are a number of key tasks/requirements that businesses planning to claim the R&D Tax Incentive for activities carried out in the FY2020 year need to complete.
Advance and Overseas Findings
A provisional Advance or Overseas Finding application form is required to be submitted by 30 June 2020. The provisional application requires that businesses provide minimum details in:
• Company contact details; and
• Descriptive name/title of claimed R&D activities
While the level of detail required before 30 June is considerably less than the information needed for a full application, it’s important to note that you will need to provide the complete detail before the end of September.
It’s important to remember that an Overseas or Advance Finding on its own does not constitute registration of the R&D activities. Businesses with an Advance or Overseas finding still require a registration number from AusIndustry to realise the benefit of the Incentive through the Company Tax Return.
Speak to our Grants & Incentives team for more information on Advance and Overseas findings.
Payments to Associates
Eligible R&D expenditure may include costs incurred to an ‘associate’. Businesses incurring costs to an ‘associate’ however, can only claim that expenditure when they have paid it before the end of the income year.
Where a business has not paid an amount to an ‘associate’ until a later income year, the claimant will either forgo the notional deduction relating to that expense amount altogether and claim a normal tax deduction on an incurred basis, or defer the claim for the notional deduction until the year in which they make the payment.
The term ‘associate’ in this instance includes shareholders and directors of the company as well as other related legal entities (such as trusts). Anyone wishing to include payments incurred to associates as part of their R&D Tax claim for FY2020 should, therefore, ensure all payments are made before 30 June 2020.
Speak to our Grants & Incentives team for more information on Payments to Associates.
Of course, the end of financial year also provides an opportunity to review your contemporaneous record keeping to ensure you’re meeting the requirements of the Incentive. Our team is on hand to assist you with any requirements.