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ATO Guidance noting Common errors in R&D Registrations and Schedules

When processing R&D Applications and R&D Schedules, both AusIndustry (DISR) and the ATO have processes in place to conduct integrity checks of claims and identity claims for compliance activity.

Claims found to have anomalies, or that may require more detailed compliance will likely be subject to delays in processing of R&D tax offsets.

On 17 July 2024 the ATO posted updated guidance that notes issues that may be the subject of initial registration checks and delays. These registration/integrity reviews may be over any above the detailed substantiation and eligibility requirements that companies must suffice in the event of a detailed examination or review.

The guidance notes:

DISR has identified some common errors made by entities and their representatives during the registration application process lodged with AusIndustry. These errors delay the progression of applications. To avoid delays, ensure you check the following:

• You’re applying for the correct income year. The income year needs to match the income period on the company’s income tax return submitted to us. This can’t be amended by a variation.
• The correct entity is applying. Only the head company of a consolidated or multiple entry consolidated group can apply to register R&D activities. The head company must register R&D activities performed by any member of the group. This information can’t be later amended by a variation.
• The contact details are correct. The primary contact must be a company representative with their correct email address – not the email for a tax agent, adviser or consultant. Contact details for agents, advisers and consultants are required elsewhere in the application form. Any amendments made after submission will require you to complete a variation, resulting in a delay in registration.

To avoid delays in processing your company tax return and R&D schedule lodged with the ATO, ensure you check that:

• the AusIndustry – IISA number is correct on the R&D TI schedule and corresponds to the income year of the return
• label D – preliminary calculation on the R&D TI schedule matches item 7 label D on the company tax return
• Part D – reporting entity annual turnover has been correctly calculated and placed under the correct label on the R&D TI schedule (Note: The annual turnovers of connected and affiliated entities must be included in the calculation of aggregate turnover of the reporting entity)
• Part E label R tax rate is correct.

Please get in touch with our office if you require assistance, would like to speak to someone about a potential claim, or check out our website for more information.