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The RDTI is Australia's flagship program to support businesses investing in innovation in Australia. The aim of the R&D Tax Transparency Report is to improve accountability. Transparency is crucial for maintaining public trust in our tax system and programs like the RDTI are not immune. Making some of the details around RDTI claims more accessible, encourages businesses to ensure their claims are accurate and compliant with all legislation and available guidance.
The data points in the report relate only to the 2021-22 financial year and reflect the following details for each entity that lodged a R&D claim:
Subsequent reports will be published annually, detailing the claims from the previous financial year.
The recently released R&D Tax Transparency Report provides valuable insights into the landscape of R&D and innovation in Australia. As an entitlement-based program, the RDTI is open to a broad range of industries and the report revealed over 11,500 entities collectively declared an R&D expenditure of $11.2b for the 2021-22 financial year. The report highlights substantial differences in R&D spending across entities, ranging from $0 to more than $200m.
The average R&D expenditure recorded is just below $1m, while the median is slightly above $300,000. This disparity indicates that while some companies have substantial R&D expenditures, the majority spend around the median value.
The report underscores the importance of robust compliance and governance frameworks, emphasising that businesses must ensure proper documentation and processes are in place to support any RDTI claims made.
Upon considering the data, it is evident that there is a consistent demand for heightened investment in innovation and R&D within Australia. The goal is to see more businesses accessing the program, thereby balancing the average expenditure and reducing the disparity caused by larger R&D claims.
If you have any questions or need further discussion on what this report might mean for you, please reach out to Grant Thornton’s Innovation Incentives team.
Tax Agents Disclosures
The Tax Practitioners Board maintains a register of tax agents and BAS agents. You can access and search this register here.
Your engagement letter with Grant Thornton and the Standard Terms and Conditions set out our procedures for dealing with problems or complaints. The Tax Practitioners Board also has a complaints process in relation to tax agent services as outlined on their website which can be accessed here.
Section 45 of the Tax Agent Services (Code of Professional Conduct) requires Grant Thornton to notify you if it becomes aware of any matter which could significantly influence your decision to engage us or to continue to engage us in relation to the provision of tax agent services. Grant Thornton is not aware of any such matters.
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