The Right Way Forward

Key Points:

  • Minister Hon Karen Andrews commits to helping the tech industry achieve clarity around the R&D Tax Incentive (RDTI)
  • The Small Business Ombudsman has launched an investigation into AusIndustry & the ATO’s administration of the RDTI
  • This focus comes on the back of unfair treatment of applications by the tech industry, particularly software developers.

This week, Minister Hon Karen Andrews from the Department of Industry, Innovation and Science marked her 100 days since being reappointed to the role by committing to give companies greater certainty about their claims under the R&D Tax Incentive regime.

Minister Andrews says Government and the tech industry need to work closely together to achieve this with the two key focus areas being:

  1. Improvement to the administration of the R&D tax incentive; and
  2. A more co-ordinated approach by tech industry associations in dealing with government to articulate their needs.

The Minister has ruled out any changes to the definition of what constitutes R&D or any intention to spend effort on guidance, with her focus being on helping companies achieve the clarity they need on the true eligibility of their R&D activities and assurance that refunds won’t be clawed back. CharterNet supports this announcement from the Government and believes this is precisely where the focus needs to be.

CharterNet’s Sameer Kassam said “we welcome Minister Andrews’ commitment to the setup of more effective channels for industry engagement as well as a focus on improved administration around the Incentive. It is, therefore, promising to see the Small Business Ombudsman, Kate Carnell also stepping in to effectively investigate the way in which the R&D Tax Incentive program is being managed.”

The investigation by the Ombudsman comes on the back of start-up companies being required by the ATO to pay back up to $200 million in incentive payments received over as much as four years, some of which has been highly publicised in recent media.

This has been a particular issue for the technology industry and companies engaged in software R&D. With the current review arrangement between AusIndustry and then the ATO, Australian tech companies are raising issues around the treatment they have received through the review and audit process, across AusIndustry and the ATO.

In an interview published this week on, Mrs Andrews has said “I am working very closely with the department and they have been specifically tasked with coming up with ways to improve the administration of the R&D Tax Incentive, because it is pretty clear that has been one of the issues, that many firms have not been clear about whether their work would be approved under the RDTI or not, and we need to make that abundantly clear.”

CharterNet supports further moves towards greater clarity and believes key stakeholders can work closer together around shared issues addressing the R&D Tax Incentive such that it can continue to be both domestically and globally recognised as one of the best federal government R&D Tax Incentive schemes.