R&D Key 2024 EOFY Considerations and Deadlines

As the end of the financial year (EOFY) approaches, now is an opportune time to assess and familiarise yourself with the key considerations, updates, and deadlines associated with the R&D Tax Incentive (R&DTI) program for the year 2024. Pleasingly, there were no significant R&DTI updates in the 2024 Federal Budget. 

The EOFY also provides a valuable opportunity to assess your intentions and plan your R&D activities and reporting for the upcoming 2025 year. 

To help you navigate the EOFY, we’ve outlined some key R&DTI considerations to bear in mind.  

Claiming Payments to Associates 

To claim expenditure as a notional R&D deduction on eligible FY24 R&D activities, it is crucial that any expenses incurred to an associate, which refers to an entity or individual with a ‘majority voting interest’ or ‘sufficient influence’ over your company, are both incurred and paid (by way of cash transaction or constructive payment) before 30 June 2024. 

If you have incurred expenditure to associates during FY24 but have not made the payments (and extinguished liability) by 30 June, you can still carry forward and claim the amount in subsequent years following payment.  

Now is the time to assess your associate relationships and ensure the payment of any outstanding amounts incurred to associates is made before 30 June 2024 if you wish to include them in your 2024 R&DTI claim. 

Have you undertaken R&D activities overseas in 2024? 

An Australian entity is eligible to claim R&D expenditure incurred on Overseas Activities provided that an application for an Advance/Overseas Finding is lodged by the end of the income year in which the activities are undertaken, and the following conditions are met: 

  • The overseas R&D activity is required to progress an Australian core R&D activity that has a significant scientific link because the activity cannot be carried out in Australia (for reasons other than cheaper pricing); and 
  • The overseas R&D expenditure is less than expenditure on project activities conducted in Australia; and 
  • The activities are being done for a significant extent for the Australian R&D entity. 

For the overseas expenditure to be eligible, the company must submit an Advance/Overseas Finding  Application with AusIndustry for pre-approval of those activities and expenditure. 

If you believe you have undertaken an eligible R&D activity overseas in FY24 and would like to apply for an Advance/Overseas Finding, please contact us immediately. 

Importance of Contemporaneous Records for FY24 R&D Activities and Expenditure. 

Companies have an obligation under the R&DTI program to maintain contemporaneous documentation that evidences and outlines both the core and supporting R&D activities carried out during the income year.  

Contemporaneous records (i.e. records prepared and collated in preparation for and as R&D activities are being undertaken) should be in place and easily accessible at the completion of FY24 to substantiate your R&D tax claim and support your self-assessment process and why the activities/expenditure meet the R&DTI eligibility criteria.  

As part of the 2024 Federal Budget, The Australian Taxation Office (ATO) is set to receive a substantial $187 million in funding to continue to enhance its efforts in combating tax and superannuation fraud.

This investment forms a critical part of the government’s broader initiative to strengthen tax compliance and protect the integrity of Australia’s financial systems. 

Given this Budget announcement and recurring scrutiny and emphasis on R&DTI governance and record-keeping by regulatory bodies, it is vital to prioritise evidencing your R&D activities and the nexus to expenditure incurred on these activities. 

Early Lodgers 

Ready to get your FY24 R&DTI Application started?

Need assistance with your contemporaneous record-keeping as we approach the EOFY?  

The Gild R&D Incentives & Grants team are ready to help out.

Contact us to initiate your FY24 claim prior to year-end, allowing you to access your R&D tax benefits sooner rather than later!