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Ombudsman to formally investigate SME complaints over R&D Tax Incentive clawbacks

Ombudsman Formally Investigates SME Complaints

Please note – There have been many changes and updates to these programs over the past few years. We love legacy content, it shows a history, it shows that we have always cared about these programs and notifying our client base. For more up to date information, please check our News or get in contact with us.

As reported recently in the Financial Review, a freedom of information search uncovered that over $500m has been reaped back from R&D Tax claims paid out by the joint scheme administrators (AusIndustry and the ATO) who have taken a very heavy handed and narrow approach to rejecting claims paid out by them up to 5 years ago.

The R&D Tax Incentive is an industry assistance program designed to incentivise and de-risk business R&D activities across all industry sectors in Australia. Many claimants chosen for audit feel they were legitimately eligible to make claims at the time of lodgement and the benefits they received many years ago were consequently reinvested back into their businesses; they also feel unjustly treated given only a small percentage of claimants were actually subjected to audit and consequent clawback.

The question that must now be asked is – how did the scheme administrators get it so wrong by paying out benefits if these claims were supposedly ineligible in the first place AND/OR how can they just change their views on eligibility and the level of substantiation required so long after processing up to 15,000 claims a year? It seems fair to glean that the design of the program and the manner in which it has been administered is largely at fault and many of the claimants affected are just the ones who have been selected and caught up in the mess.

“many of these companies now face potential administration causing loss of jobs, investment and IP”

Rather than providing an incentive to invest, innovate and create the products, processes and jobs of tomorrow many of these companies now face potential administration causing loss of jobs, investment and IP, quite the opposite effect to what the scheme was originally designed to achieve, it’s now better described as industry resistance than industry assistance, in the meantime Australia’s OECD ranking in R&D investment is at an all-time low and many R&D companies are taking their R&D activities off-shore due to the uncertainty surrounding the program and lack of positive Government policy settings.

If you have been affected by recent audit scrutiny and feel disenfranchised by the whole situation please join the queue and let the Ombudsman hear your story.

As reported in this article written by Adam Zuchetti from My Business, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) are seeking R&D Tax claimants to come forward and express their concerns and experiences if they feel wrongly treated from  having their prior year/s claims retrospectively rejected after audit and now face demands to pay back cash benefits received plus penalties/ interest, if you have been affected please email

– Ombudsman Formally Investigates SME Complaints –

Ryan can assist with services such as:

  • Scope your potential to claim various grant programs
  • Assist with the preparation and lodgement of grant applications
  • Review or provide a health check on your internally prepared grant applications
  • Establish record-keeping practices as required under various grant programs
  • Provide prepayment loans against future cash refunds under the R&D Tax Incentive
  • Keeping industry informed on all new Government policy and grant initiatives

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