AusIndustry has outlined importance of adhering to the compliance requirements for the R & D Tax Incentive.  AusIndustry use the term 'Compliance Readiness' to describe a process of having the appropriate systems and processes in place to effectively identify, evaluate and record eligible R & D activities and their associated expenditure.

Important points to keep in mind include:

1.    Ensure you understand the differences between core and supporting activities and how this relates to your business.

2.    The Core Activity involves an experiment or a set of related experiments.

3.    Keep a summary of how you assessed your company to be eligible for the R & D Tax Incentive.

4.    Provide a schedule of how the expenses of the company that have been allocated to the R & D activity relate to it.

5.    Keep records / documentation such as time sheets; general ledger entries and invoices to verify the amount of expenditure incurred on the R & D Activity.

6.    Keeps records / journals on the progress of the R & D Activity.

7.    Align the R & D tax compliance with your accounting and other management systems.

8.    Ensure that the staff responsible for allocating the Company's expenses to the R & D Activity have a sound understanding of the R & D Activity.