1. Don’t start pitching
As an entrepreneur, innovator, or inventor, you regularly need to ‘sell’ your commercial potential to investors, employees, and yourself.
It is easy to slide into the trap of pitching the commercial aims of your project.
Don’t write about the market size, your target market share, or how much money you are going to make over the long term. These things are irrelevant for the R&D tax incentive grant.
Ultimately, whether you make a billion dollars or never get a single user or buyer, your R&D Activity eligibility is unaffected.
2. Focus on the product
Your New Knowledge is the thing that you are actually creating.
Regardless of whether it takes the form of a new or improved material, product, device, process, or service, your Research and Development work must be conducted for the purpose of generating this New Knowledge (amongst other requirements).
Above all other aspects, focus your writing on the new or improved material, product, device, process, or service you are creating.
3. Talk about the failures
When you are failing to create what you envisioned, it’s natural to want to hide it.
It’s not a great feeling when things just don’t seem to be working out, but for the purposes of the AusIndustry R&D Tax Credit Registration, writing about your failures is OK.
The ultimate failure to develop your product is irrelevant to the RDTI eligibility criteria.
In fact, in some rare cases, it might actually be a problem if you are too successful.
This is because one of the R&D Tax Incentive eligibility criteria is that the outcome of your experimental activities cannot be known or determined in advance.
So, if your development of things went completely as planned with no hiccups at all, that might invite the question – was your outcome truly uncertain?
Writing about your failure can be a strong argument for uncertainty and may be a point in your favour in an R&D Activities Eligibility assessment. Don’t be afraid to vent.
4. Useful Terms
At Rimon Advisory we have written thousands of AusIndustry Registrations, and we know there are many valid ways to describe your R&D work.
If you are stuck, try using terms that are consistent with the legislation and AusIndustry guidance. This will also help you to think about what parts of your project are and are not claimable R&D.
Some examples include:
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- New knowledge
- Current knowledge
- Unknown outcome
- Systematic progression of work
- Dominant purpose
Interested in receiving assistance with writing your AusIndustry Registration technical report?
Davi Kofsky is the Head of R&D Tax - Technical Advisory at Rimon Advisory, a leading Australian R&D Tax Incentive and Export Market Development Grant consulting firm.