Please don’t say yes! Well not just yet.
You will hear lots of R&D Tax Consultants make this claim. And it’s a pretty poor one, because the program is self-assessed, which means claims are automatically approved for payment when you lodge. But that does not mean your application has been approved for eligibility, which often comes later, once you receive the funds.
So here is the rub. AusIndustry and the ATO do try to review all claimants, at least once every few years, but not until after you have been “approved” and received your funds. It might even be five years after your claim. The Government simply does not have the resources to review everyone at the time of lodgement and that’s just not how tax returns work.
So, the real claim a consultant should make is based on their success rate after compliance. Then, their rate might be dramatically different. Most consultants have claims rejected after review. Not us! And that is where we like to impress you. But it’s not just dumb luck.
We have a secret we want to share with you that Consultants will not tell you. Their shiny brochures and Google Ads will make it sound like you are safe with their perfect track record. But how do you then avoid having to pay it all back later, after the initial “approval”?
Let’s consider why claims are rejected. Here are four main reasons:
- The consultant is overly aggressive and draws in costs that are not eligible or cannot be justified with evidence to prove they were undertaken or relate to R&D.
- You end up drafting the R&D Plan on behalf of the consultant and since you are not a legislative expert, you either miss relevant information, express it in the wrong way or simply get it wrong. Most times the consultant will just submit your work without review.
- The consultant is not an expert. They make mistakes that send a reg flag within the ATO review system, which targets you for review.
- An audit occurs and the consultant either leaves you high and dry or they now charge you to do all the work they should have done in the first place.
So, what should you do?
We would like to share our approach, and we suggest you use this as a model:
- We use an expert team that has qualifications and experience in law, accounting, science and engineering. That covers all the bases for this program.
- We are honest with our clients about what can and cannot be claimed – it’s better you know up front and hear it from us, instead of a letter of demand from the ATO.
- Our team prepare the claim and do the hard work. We do it right the first time. We spend about twice as long as our competitors, because we presume at some stage, someone from Government will read and review the work. We know it’s a lot easier to get it right at the beginning.
If you are not sure how to pick a consultant, or to know if your current one is up-to-scratch, we will happily provide you with a free evaluation and health check.
GrantReady is a well-established team with a long history of successfully assisting companies access the R&D Tax Incentive.
Complete the form we’ll give you a free eligibility assessment or call us on 03 9853 9853.