Practical Reflections on the R&D Tax Incentive — Link R&D Advisory

Connecting Innovation to Incentives

Home
About
Services
R&D Knowledge
Practical Reflections

You are here: Home Practical Reflections 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

These articles are written by Link R&D Advisory to help businesses understand the practical side of the R&D Tax Incentive and its evolving guidance from the ATO and DISR.

They are general in nature and not a substitute for tailored advice. If you have a question about how the rules apply to your project or company structure, you’re welcome to get in touch for a detailed discussion.

DISR R&D Tax Incentive Form Planned Update: What to Expect for the Mid-August 2025 Changes
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.

Keeping R&D Tax Incentive Records: Persuasive, Not Prescriptive
While documentation isn’t legally required in all cases, it remains the most persuasive way to support your claim. This article explores recent court commentary, practical advice, and how to approach recordkeeping without getting overwhelmed.

How the R&D Tax Incentive Works – A Clear Guide for Australian Businesses
A plain speaking article explaining how the R&D Tax Incentive works, who is eligible, what can be claimed, and key official resources. It contains practical notes on cash flow and tax reconciliation considerations.

Updated R&D Tax Incentive Application Form: What to Know for August 2025
The R&D application form has changed for the first time in four years. This article outlines what’s new in the 2025 form, how it affects claimants, and what businesses can do now to prepare for upcoming years.

The R&D Tax Incentive Schedule in Your Company Tax Return: What It Is and Why It Matters
The R&D Tax Incentive is claimed in two parts: registering your activities with DISR and completing the R&D Tax Schedule in your company tax return. This article explains what the schedule includes, why it matters for compliance, and how we prepare it.

What the ATO 2023 R&D Tax Incentive Transparency Report Tells Us
The ATO’s latest Transparency Report shows nearly 13,000 claimants and $16.2B of R&D expenditure in FY23. We look at who really benefits, WA’s standout growth, and how recent changes like feedstock treatment affect the picture.

Understanding “Expenditure at Risk” Under TR 2021/5 — Why Contracts and Invoicing Matter for R&D
The ATO’s at risk rule under TR 2021/5 defines when R&D expenditure can be claimed, focusing on who truly bears the financial and technical risk at the time costs are incurred. This article explains the rule in plain terms, why contract wording and invoicing structure are critical, and how to ensure your documentation supports genuine R&D risk.

Understanding the New AusIndustry Review Approach for R&D Tax Incentive Claims (2025 Update)
From July 2025, DISR has streamlined how R&D Tax Incentive claims are reviewed, shifting to a risk-based model that removes duplication but places greater emphasis on the quality of form inputs and documentation. This article explains what has changed, how reviews now occur, and how companies can prepare with clear, defensible evidence of their R&D work.