Over the last five years, there has been an influx of service providers, offering R&D Tax Incentive support. Every man and his dog now seem to be an R&D Tax Consultant. And the fees, these are getting cheaper and cheaper.
So, is this good news? And actually, what do you need to know?
You get what you pay for!
We all know the adage and it is especially true in this sector. No one works for free, so we asked ourselves, how can some consultants be charging so little? We investigated and discovered, many consultants now ask the client to write the R&D plan and activities. They also ask the client to advise on what R&D costs they would like to claim. This is akin to asking the passengers to fly the plane.
Having worked in this sector for over 22 years, we know what is eligible and what is not. We have strong, hard won experience in interpreting and understanding the legislation, case history and working with the program administrators. If your consultant is not doing the hard work, you are not getting value for money and more importantly, you are taking a big risk.
What could possibly go wrong?
With the R&D Tax Incentive program being part of the self-assessment income tax return process, it is likely your claim will go through automatically and then you will spend the money you get back. This is a danger. Because if your submission is later reviewed by the ATO or AusIndustry, then it will be scrutinised and likely in need of amendment. In fact, the government aims to review all claims over time. When they do, if your claim is denied, you will have to pay it back with interest and prior year claims, if they are part of the same project or deemed ineligible. We have had companies come to us from other service providers in this exact predicament. They have lost their house, their business and in some unfortunate cases their closest relationships.
The lure of the R&D Tax incentive is enticing and incredibly attractive. Too good to be true in some cases. And most consultant will sell you on this story. But jeopardising your business and life savings is not worth the risk.
So what should I do?
Finding a trusted advisor is the key. How long have they been in the industry? What is their success rate in audits? Do they have expertise in your sector? Are they a one-man band or a team? Do they subcontract their work out to third parties? Do they have tax accounting expertise and technical R&D experience?
There are very few consultants that can honestly answer these questions well. And if they haven’t been in business for at least 10 years, they have not stood the test of time. That may seem harsh, but if things go wrong with the ATO, they will more likely hold you responsible, but not your consultant.
At the end of the day, you want everything you are entitled to, but you also want to sleep at night. Your business and the future should be the focus, and the R&D Tax Incentive should be there to help you along, not distract from the journey.
The GrantReady difference
Having been active in the R&D Tax sector for the last 23 years, we have seen it all. At the end of the day, we know that honesty and accuracy is the key to success, for you and us. We have an experienced team, across industry sectors and we do the hard work to ensure your claim stands the test of time. We don’t use juniors and we don’t outsource our work. If you would like to chat to us or have us undertake a health check of your existing claim, we will be happy to give you an honest opinion, with no pressure. Feel free to