ATO Audits and AusIndustry Reviews
Audits and reviews can happen anytime. Sometimes it’s just the luck of the draw, and sometimes something specific in your lodgement triggers the review. Reviews can occur before or even after you’ve received your benefit or refund. In fact, in some cases, reviews can occur years after your lodgement.
However, in every case, getting Delve Innovation’s professional audit assistance can mean the difference between a time-consuming, stressful experience with negative results, and a seamless, streamlined experience with optimal results.
ATO Audits
The ATO recently signaled its intention to refocus post COVID compliance activities on R&D tax incentive claims.
A review of a company’s R&D tax incentive claim can take place at any time after lodging a company’s corporate tax return and will be initiated by the ATO in one of two scenarios. In the first instance, information may be requested as part of a wider review of a company’s income tax affairs and the review process is handled by a ‘generalist’ ATO auditor. In the second scenario, a company may be selected for a review by the specialist R&D tax incentive team within the ATO.
Regardless of how the ATO initiates an R&D tax review or audit, the process can drag on for months or even years (taking up valuable time and resources) if a company’s response to an ATO ‘Request for Information’ is not handled proactively. Delve Innovation’s R&D tax experts can avoid such an outcome by actively managing the information provided to the ATO. This often involves providing the ATO with information in addition to that initially requested, to ensure a company’s eligibility to the R&D tax incentive is evidenced in the first instance, rather than via the ATO ‘drip feeding’ additional eligibility questions over an extended period of time.
By providing the ATO with a fuller understanding of our client’s R&D tax incentive claim at the earliest possibility in the review process, Delve Innovation’s R&D experts have been able to maintain their 100% success rate in defending ATO R&D tax incentive reviews and audits.
ATO review – How we can help
The best first step is to ensure that you’re getting the right advice before lodging any documentation with the ATO. Of course, sometimes even the most complete and truthful lodgements are selected for review.
If you’re subject to an ATO review, we can certainly help manage the process. Our wide range of ATO audit services include:
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Managing the audit process
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Representing you at meetings and formal interviews with the ATO
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Compiling and providing additional documentation required
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Preparing voluntary disclosures and responses to ATO audit position papers
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Limiting the scope and issue in dispute
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Minimising any penalties
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Negotiating an effective and speedy resolution
AusIndustry Reviews
Many claimants of the R&D tax incentive believe that their R&D claim has been accepted as ‘eligible’ if they receive a registration number from AusIndustry after lodging their annual R&D Application form. This however is not the case. The R&D tax incentive program is a ‘self assessment’ program, meaning that while the ATO and AusIndustry accept an R&D claim ‘as lodged’, they can review the eligibility of a claim for several years following lodgement.
AusIndustry is the regulatory body tasked with confirming if registered R&D activities meet various eligibility criteria. AusIndustry reviews can be initiated either randomly or due to specific targeted concerns.
If you become the subject of an AusIndustry review you will likely need to respond to questions, concerns or requests for additional information. You may also need to appear at hearings or before the Administrative Appeals Tribunal. Ultimately, if things don’t go well, you may be required to repay the R&D Tax Incentive benefit, possibly with penalties.
How we can help with AusIndustry reviews
Prior to responding to any enquiries from AusIndustry, R&D tax claimants should seek advice from Delve Innovation’s R&D tax experts in order to assist in minimising the potential for multiple follow up requests for information from AusIndustry or, worse still, an adverse outcome because AusIndustry did not have the right information in order to confirm eligibility to the program.
If AusIndustry initiates a review of a company’s R&D activities, Delve Innovation’s R&D tax team can assist with a wide range of services in order to achieve the best possible outcome, including:
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Managing the review or audit process
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Preparing or reviewing information prior to submission to AusIndustry
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Representing you at meetings with AusIndustry
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Limiting the issues and scope of AusIndustry enquiries
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Arranging expert submissions to evidence certain eligibility criteria (such as new knowledge)
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Negotiating effective and satisfactory outcomes
Why Choose Delve
Delve Innovation’s R&D tax experts have had over two decades of successfully assisting clients respond to both ATO and AusIndustry R&D tax reviews and audits. Our 100% success rate is testament to our capabilities in defending R&D tax incentive claims, an outcome that has enabled our clients retain the benefits associated with making their R&D tax incentive claims.
Our acknowledged technical capabilities and depth of specialist experience allows us to make what can be a stressful and resource consuming process move along quickly and efficiently, while always achieving the best outcomes for our clients.
