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Core and supporting R&D activities : claiming your tax incentive

Core and supporting R&D activities : claiming your tax incentive

‘What can I claim?’

It’s one of the first questions that comes to mind. Grants can seem overwhelming if you haven’t gone through the application process before. But it’s as simple as investing the invest time into understanding the in’s and out’s.

Let’s pop that big question mark bubble and go through the eligible activities.

The activities you can claim break down into two categories: core and supporting.

Core tasks you undertake

Innovation means pushing the boundaries and doing things that haven’t been done before. This is core R&D activities. You don’t know the outcome and in order for you to progress with new findings, a systematic action plan is required.

For example, core activities could be testing or improving a product, device or service. Think of core activities as tangible steps in achieving your overall mission.

You need at least one core R&D activity to make a claim.

As you’re going through your application, ask yourself these questions about what core R&D activities you can claim.

  • Was an experiment (or set of related experiments) performed?
  • Could the outcome of the experiment have been known prior to testing?
  • Were the experimental activities carried out scientifically?
  • Was the main goal to generate new knowledge? 

Man deciding Research and development tax incentive activities

Activities that support your goal

Big findings or new breakthroughs don’t just appear out of thin air. It takes a collective of activities and small wins. Supporting R&D activities are the things that support core R&D activities.

They need to be directly related with the core activity, such as:

  • Produce, or are directly related to producing, goods or services
  • Are listed as an activity excluded from being a core R&D activity

Supporting activities must be completed for the sole reason of aiding core R&D activities. The more important a part of an activity is, the clearer you will need to describe it in the registration process.

You can choose to ‘group’ your activities together into an individual R&D activity. In this case, each action, say multiple tests that are part of the same core activity are seen as a single activity.

Other examples could be:

  • Testing a prototype medical device on a number of different sets of patients for its ability to diagnose multiple disease stages
  • A number of similar tests aimed at assessing the effectiveness of a new chemical mixture to extract different contaminants from soil
  • Multiple iterations of the same type of test required obtaining a reasonable level of certainty or statistical significance.

Make sure you can clearly articulate why you have compiled the activities into one group. Be careful not to group a mix of different activities. You’ll be asked to explain the relationship of every activity in the group and how they interlink.

If you need help with deciphering your core and supporting R&D activities, we can help.

Don’t let the paperwork or technicalities put you off. We’re here to support you.

Ray will go through the five W’s – who, what, when, why and where.

Contact us today.

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  • 0413 815 108
  • rseeto@zeikin.com.au