During October 2013, AusIndustry released the new version 5 of the R&D Tax Incentive Application form.  This new form is even more explicit regarding information required to be provided by applicants.


Version 4 forms that have already been downloaded can continue be used, but new version 5 forms must be downloaded for future applications, which means that the changes detailed below will apply from now for all new applications.


The new version 5 form will require more targeted descriptions of the nature of "core" and "supporting" R&D activities.  It will also provide applicants the opportunity to effectively assert how their activities are eligible under the R&D tax incentive legislation.


Some changes in reporting have minimal administrative implications.  However, there are new key disclosures within the application, including:


·         The new version 5 forms now require a description of the new knowledge that is intended to be produced by the core activities and how it differs from the existing current knowledge in the relevant field of study;

·         A new section now clearly requires an explanation of how the outcome of the registered core activities could not have been known in advance, based on current knowledge, information or experience.  Aside from adhering to the legislative requirements, this may help AusIndustry assess if the applicant took reasonable steps to consider the extent of the knowledge gap before conducting the R&D activities.


The version 5 form now sets out more guidance on the level of information that AusIndustry requires about registered "core" and "supporting" R&D activities, including:


·         Each core activity should be described as an experiment (or a set of related experiments) and include:

o    a statement about the hypothesis of the experiment;

o    brief details of the experiments being carried out, results and conclusions;

·         Each registered supporting activity should include a more detailed explanation of how it contributed, or will contribute, to the corresponding core activity.


These changes serve to amplify the knowledge that there is an ongoing need for contemporaneous substantiation in supporting all R&D claims.


The ATO has highlighted the importance of keeping good records for R&D claims and it also notes that recent cases demonstrate that activities and expenditure must be supported by relevant source documentation.


Recent case findings have reiterated that projects which would otherwise be eligible, may be disallowed on the basis of poor documentation and poor evidence – an important lesson for all applicants of both the former R&D tax concession and the R&D tax incentive going forward.


Lowe Lippmann recommends that all Applicants consider these recent changes to the requirements of the expanded application to ensure their activities are self-assessed correctly.


Please do not hesitate to contact your Lowe Lippmann advisor if you wish to discuss any of these matters further.