{"id":242757,"date":"2019-08-28T13:15:17","date_gmt":"2019-08-28T03:15:17","guid":{"rendered":"https:\/\/southburnett.com.au\/news2\/?p=242757"},"modified":"2019-08-28T13:17:55","modified_gmt":"2019-08-28T03:17:55","slug":"ombudsman-concerned-by-rd-crackdown","status":"publish","type":"post","link":"https:\/\/southburnett.com.au\/news2\/2019\/08\/28\/ombudsman-concerned-by-rd-crackdown\/","title":{"rendered":"Ombudsman Concerned By R&D Crackdown"},"content":{"rendered":"
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Ombudsman Kate Carnell
(Photo: ARC)<\/figcaption><\/figure>\n

August 28, 2019<\/strong><\/p>\n

Australian Small Business and Family Enterprise Ombudsman Kate Carnell has welcomed the recent Federal Court decision surrounding Moreton Resources’ research and development claim linked to the failed\u00a0Coolabunia UCG project.<\/p>\n

Ms Carnell said she was concerned by reports the Federal Government had clawed back $200 million in the 2018 financial year from businesses who have claimed the R&D Tax Incentive.<\/p>\n

She has been investigating the impact of the ATO\u2019s policy and enforcement practices on small businesses.<\/p>\n

\u201cMy office has received a number of complaints from small businesses about unfair treatment in relation to their research and development tax incentive claims by the ATO and AusIndustry,\u201d Ms Carnell said.<\/p>\n

\u201cOf particular concern are audits going back several years, which have resulted in the ATO demanding businesses repay the R&D Tax Incentive, often with a severe penalty applied.<\/strong><\/p>\n

\u201cUnfortunately some of these businesses have been told to pay back the tax benefit years after the R&D has been completed. This is well after they received the refund from the ATO and reinvested that money back into the business.<\/p>\n

\u201cMost of these businesses were genuine in their belief they were undertaking R&D and that their claims were totally justified.<\/p>\n

\u201cWe\u2019ve had additional feedback from software industry representatives that the interpretation of the laws by AusIndustry and the ATO, regarding the eligibility of software claims, has become more rigid.<\/p>\n

\u201cThese issues have prompted a review to clarify the R&D Tax Incentive legislation and how it\u2019s enforced.<\/p>\n

\u201cCertainty is essential if the R&D Tax Incentive is to fulfil the purpose of the legislation, which is to incentivise small businesses to invest in R&D.<\/p>\n

\u201cWe welcome the recent decision by the Full Bench of the Federal Court in the Moreton Resources Limited v Innovation and Science Australia, <\/em>which has provided greater clarity around the interpretation of the laws.<\/strong><\/p>\n

\u201cThis case concerned the question of whether activities in relation to an underground coal gasification pilot facility were eligible for the R&D Tax Incentive. The court took a common sense approach and found in favour of Moreton Resources.<\/p>\n

\u201cFor Australian small businesses to continue to thrive, the government needs to support investment in science and research to drive innovation and growth.\u201d<\/p>\n

The Australian Small Business and Family Enterprise Ombudsman will deliver the findings of its investigation in a report to be published shortly.<\/p>\n