The other “hot topic” in R&D Tax world of late has been the impact of Jobkeeper on R&D claims.
Following numerous requests from R&D advisors, including Saving Point, on July 27th the ATO released draft Taxation Determination TD 2020/D1 Income tax: notional deductions for research and development activities subsidised by JobKeeper payments. While this is still open for comment, it claims that an R&D entity cannot notionally deduct all or part of its wage expenditure which entitled the entity to a JobKeeper payment due to the application of the ‘at-risk rule’ in s 355-405 of the ITAA 1997. A recent ATO webpage explains that expenditure the entity incurs on R&D activities that cannot be notionally deducted does not give rise to an R&D tax offset.
If you plan to claim the R&D Tax Incentive in relation to your FY2020 activities, it is important that this determination is considered as part of your claim. The team at Saving Point are available to discuss this with you further.