Practical Reflections on the R&D Tax Incentive

The incentive in simple terms.
The R&D Tax Incentive is a great program. However, in practice, managing it well comes down to understanding how to identify, document, and support R&D operations often in a business setting. This section shares practical reflections to help businesses apply the program meaningfully and avoid common mistakes.

These aren’t meant as technical rulings or summaries, just grounded observations based on experience working with companies across a range of industries.

What makes an activity “R&D”?
The core test is whether you're conducting experimental activities to resolve technical or scientific uncertainty. Not just improving something in a known way, but genuinely trying to figure out how to do something in a way that couldn’t be known in advance.

Key questions to ask:

Were the outcomes uncertain when you started?
Did you approach the work in a structured, systematic way?
Was there a need for new knowledge or technical insight, rather than just a commercial business strategy?

Common mistakes and how to avoid them.
Some of the most common issues we see include:

Focusing on describing commercial development instead of technical work. Instead, focus on what was technically uncertain, not just what was delivered to customers.
Assuming any software or product work qualifies. Activities must meet the legislative definition, not just be “new to your business.”
Claiming before structuring. When claiming retrospectively, it’s easy to miss documentation or stretch definitions. It’s best to define R&D early and build the record as you go. The key word used by DISR is “contemporaneous” documentation.

Set your project up from day one.
One of the best ways to reduce risk and maximise your claim is to:

Define R&D activities early. Seperate them from broader operational work.
Document as you go. This can take many forms – emails, photographs, logs, test results, failed iterations, team notes, invoices, contracts. A clear and supported explanation of the nexus and link to the activities is what matters.
Keep it simple. Use your existing systems (Slack, Jira, timesheets) to capture progress. Link R&D Advisory can also provide templates and more specific examples tailored to your business.

This makes reporting smoother, reduces compliance risk, and can help with commercial decision-making .

Final thoughts.
This page doesn’t cover everything. It is meant as a simple starting point. But if you’re actively engaging in technical problem-solving, it pays to pause and ask:

Are we documenting this clearly?
Are we confident it meets the definition?
Is there a better way to plan our next phase?

If you'd like help setting up a project and activities, reviewing eligibility, or just talking it through, feel free to reach out. This is what we specialise in and we’re here to help.

Practical Insights & R&D Updates

Browse the latest updates below. These are added throughout the year as new questions, issues, and changes arise in the R&D Tax Incentive space.

Updated R&D Tax Incentive Form: What to Know for Mid-August 2025
The DISR is introducing a new form with more detail required upfront. Here’s what’s changing and why mid-August matters.

How Would You Even Know About the R&D Tax Incentive?
Many businesses only hear about the R&D Tax Incentive after the fact. This article considers why that happens, and how to know if it applies to you.