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Another year, another R&D “crackdown”

December 21, 2018 by Ben Thompson

It was little over a year ago that the previous “crackdown” was at play and the take-home then is the same as now – there have been NO changes to legislation or the method in which AusIndustry or the ATO is applying guidelines to R&D Tax Incentive applications.

It’s been a busy end to the calendar year with Fairfax Media (RIP), abuzz with multiple AFR articles regarding Airtasker needing to pay back millions, and other news outlets running with similar stories.

This quickly flowed on to Labor’s support for positive reform to the program before spiralling out of control with PwC staff being axed (a case of history repeating!), calls for clemency, and finally (for now) Deloitte busted doing the wrong thing with CBA.

Why are we seemingly in a groundhog day cycle? Aside from the ongoing vacuum regarding certainty of government policy in the space, the root cause is that of ignorance and greed.

The constant banging on in the press that fitting agile development within the R&D framework is too difficult is an opinion which we strongly contest. It is only difficult when there is no eligible R&D in what is being put forward.

Given AusIndustry is demanding Airtasker return all R&D monies it says they found 0% of their activities were eligible R&D; either because there was no technical risk, there was no experimentation or they lacked evidence that any of it happened. Or worse; that overseas developers were involved or they were claiming software that had internal use only (see Deloitte & CBA link above).

Fraud-vibes aside; how could a submission be determined as 100% wrong by AusIndustry? This is either because there was no technical uncertainty, or because the argument was tackled from a functionality-first perspective which always fails. We will be covering this in much more depth in a series of blog posts in the new year that will break it down in fine detail.

In the meantime; AusIndustry has amazing plain-english breakdowns of the problems they see in software-based claims and how to avoid making rookie mistakes (eg commercial risk, whole-of-project, standard SDLC etc). But, no one enjoys homework so let’s shift the focus to where it is rightly being shone by AusIndustry – shonky R&D Tax advisors.

Engaging external service providers comes with the explicit understanding they they are professionals in their field and have intimate understanding of the rules and how they are applied in the real world. All recent press confirms that Big4 providers have been doing the wrong thing, for multiple years, all underwritten by T&C’s that abrogate them of any liability for said advice – even in the event it was bogus or wrong (“but its standard policy in financial services”). When the shit hits the fan it’s hard to see an incentive for advisors to do the right thing when there are additional billable hours on the table in the event of an audit.

At TechLever we know software from back(end) to front – Mike even writes his own. We get paid on completion, with followup questions or audits on our head at no extra cost – we share your risk. Our 100% record, with no lock-ins, speaks for itself.

Happy New Year all – use my fire to fuel a summer BBQ 🙂