Govt outsources R&D tax scheme compliance

Denham Sadler
Senior Reporter

A Canberra-based accounting firm is now assessing some claims under the research and development tax incentive after the federal government went ahead with its plan to outsource elements of the popular scheme.

Since March this year, Bellchambers Barrett, a bespoke ACT-based company offering consulting, audit and assurance, tax and business advisory and superannuation services, has been assessing some applications for the research and development tax incentive (RDTI), more than two years after the federal government first announced plans to outsource some elements of the scheme’s compliance.

Bellchambers Barrett was awarded a $376,000 contract with the Industry department in January this year for the RDTI compliance service, running from 3 February to 31 October this year.

Outsourced: R&D Tax Incentive compliance work to an accounting firm

The 2018 budget reforms to the RDTI, which included the controversial $1.8 billion cuts currently before the Senate, provided funding to the industry department of $4.4 million over four years for “greater enforcement activity and improved program guidance to participants”.

The department issued a tender for “program integrity support” in February last year, looking for a supplier to “assist with program integrity functions for the research and development tax incentive program”.

Bellchambers Barrett eventually won this contract, and began working to assess RDTI claims from March this year.

According to the government, the private firm is only assessing advance and overseas finding applications, where companies are looking for assurance in advance that they will qualify for the RDTI program.

“Bellchambers Barrett were awarded a contract in January 2020 to work alongside the department to assist with the assessment of advice and overseas findings. All decision-making will remain with the department,” an Industry spokesperson told InnovationAus.

If a claim for advance and overseas finding is going to be assessed by Bellchambers Barrett, the company will be contacted by the department.

An advance finding is for a company looking to make sure it will qualify for the RDTI and must be made before the end of the first income year in which the activity was conducted.

An overseas finding relates to a company conducting most of its R&D locally, with some conducted overseas that can’t be done in Australia. This overseas R&D can also be eligible for the RDTI under the scheme if the company meets a number of criteria.

While legislation introducing a number of significant changes to the RDTI is still before Parliament and the subject of an ongoing Senate inquiry, a number of the other reforms first unveiled in the 2018 budget are starting to be rolled out.

Along with the outsourced compliance, the department has also brought in Deloitte to build a new tech platform to assist with the delivery of the RDTI. The big four consultancy was awarded a contract worth more than $1 million to help design and build the new portal, with a plan to launch it next year.

The new platform will improve the IT systems and customer-facing forms used by businesses to register for the RDTI, the government said.

Shadow industry minister Brendan O’Connor criticised the government for awarding the contract while the RDTI legislation is still yet to pass Parliament.

“Given the uncertainty on when Parliament will vote on the tax incentive bill – let alone whether it will pass in its current form – it is highly presumptuous for the government to spend millions of taxpayer dollars building a platform partly based on the RDTI cuts to innovative firms,” Mr O’Connor told InnovationAus.

“The government attempting to side line Parliament is becoming all too common – this time, at the expense of the innovative firms who should be supported to survive and thrive in the COVID-19 economic recovery.”

Do you know more? Contact James Riley via Email.

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