How to make Building and Construction R&D simple – it’s not off the shelf solutions!

Here's a quick tip from us about avoiding one of the ‘risky’ mistakes some companies make in their building and construction R&D Tax Incentive claims.

The R&D Tax Incentive supports building and construction R&D. But there

are some restrictions, particularly in how the ATO treats expenditure.

For example, the ATO won’t allow the R&D incentive to be claimed for expenditure incurred to acquire or construct a building or part of a building, or an extension, alteration or improvement to a building. Your tax adviser can help you understand your tax claim.

But first you need to define what your R&D activities are, and this is where some claims run into problems and are denied, and here’s one of the mistakes that can cause that.

If you have a technical problem that you work to resolve, but your solution is to use off the shelf products to do what they’re designed to do, then it’s probably not R&D.

AusIndustry says that activities that only apply established building materials, designs, or processes to localised conditions, problems or requirements are unlikely to qualify as core R&D activities. This is because they are part of the established knowledge base available to a competent professional in the field and the outcome of their application is known or able to be determined in advance. There is generally no new knowledge created through the application of established techniques or products to new sites, designs or problems. A competent professional would be expected to be able to resolve these challenges through the application of existing knowledge, information and experience.

Companies that don’t work this out, and then claim activities where they use existing solutions may be making risky claims that get targeted, and could lose out on the R&D incentive. This can happen when claims are made by your finance or tax manager, or accountant or R&D consultant, who may not know or fully understand the details of the R&D that you’re doing.

But there are ways to do eligible R&D to work out how to solve a problem or develop a new product or process using off the shelf products. R&D Certainty can help you work out whether you can do that and ensure that your R&D claim is eligible.

R&D Certainty specialises in working with businesses to make sure they can identify what the technical challenges are in their projects that they’re doing R&D activities to solve. We can help you plan, document and execute your R&D simply and well, to get good R&D results and make it easy to claim the free money support for R&D from the government’s R&D Tax Incentive.

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