When it comes to choosing an R&D tax consultant, finding the best one for your business is vital. But making the right choice can seem daunting. So, what is an R&D tax consultant, and what does an R&D tax consultant do? In a nutshell, R&D tax consultants help you prepare and lodge your application for the Federal Government R&D tax incentive (RDTI) with AusIndustry. And in doing so, they advise you on your eligible research and eligible R&D costs to ensure your claim complies with Australian Tax Office (ATO) rules. R&D is a broad church, and the myriad of R&D tax consultancy firms offering services can leave businesses with R&D activity wondering who to turn to for help.
While R&D and innovative companies come in all shapes and sizes, there are still some golden rules you can follow. We’ve assembled these handy tenets to help you navigate the R&D consultancy landscape. That way you’ll optimise the benefits for your business, whatever your company’s stage, size or sector.
1. Find R&D tax expertise to suit your business
If you’re going to the effort of claiming the RDTI, you might as well give it your best shot. After all, having the right cash flow and capital mix is not just important for businesses doing R&D – it’s essential. Success or failure of innovation can quite literally turn on a dime. So, having the right R&D tax expertise on hand to help you maximise your R&D makes sense. What constitutes the right expertise needs to be considered in the light of your R&D investment, whether you’re a small business with early-stage research or a larger, later-stage enterprise.
Different strokes for different folks
There are three main categories of R&D consultants your business can choose from:
- Full-service specialists: these providers offer a one-stop-shop and handle everything for you, from writing the technical part of your claim and generating the tax calculations, to offering full audit support if the ATO audits your claim.
- Accountancy firms: most accountants can offer R&D tax incentive advice in addition to their general accounting services. Typically — but not always — accountants tend to offer a less comprehensive service than full-service R&D specialist consultants. For example, some accountants will supply the tax calculations but only review rather than write the technical part of your claim. So it’s important to make sure you know which aspects of the process are included by your accountancy firm. That way you can make an informed choice about your company’s requirements when it comes to applying for the RDTI, or if your business is audited by the ATO.
- Simplified specialists: a new breed of simplified specialists is also an option for RDTI-savvy businesses that need a fresh pair of expert eyes to look over their R&D tax refund application. The downside to this option and the completely DIY option, where businesses handle the entire RDTI application process themselves, is that it takes the opportunity for R&D financing off the table. And this, in turn, means you preclude your business from maximising your R&D refund because R&D financing (if reinvested in R&D) creates additional refunds.
Bigger is not always better
It’s important to mention at this juncture that getting expert advice on your refund doesn’t equate to your R&D tax consultant chasing down the largest refund. It’s important to have confidence that you’re getting sound advice and your R&D refund is the maximum compliant R&D tax refund you can lodge. Make sure you’re confident that your R&D tax consultant is advising you to lodge claims that are entirely in line with current RDTI rules and regulations.
2. Look for industry experience
When choosing an R&D tax consultant, put firms with industry experience or those with an interest in your company’s sector on your shortlist. If your consultant knows your sector, they will be well-placed to write the technical claim of your application, or review and advise if you decide to draft it yourself. It will also mean they have sufficient technical insight and passion about your industry to advise you adequately on the compliance issues around your claim.
3. Reputation matters
Quantitative benchmarks count
The third and final golden rule for choosing an R&D tax consultant is that reputation is everything. Don’t shy away from asking your preferred R&D tax consultants probing questions about their track record and previous claim history.
Qualitative assessments are valuable
Check if your shortlisted consultants have any client testimonials you can review and query if they’re keeping up to date with the latest changes to the RDTI. It’s also worth exploring whether they can offer broader support for your business. Can they advise your business about other grants? Or do they have a strong network you can access if you need additional services, such as intellectual property lawyers? A healthy network in and of itself is a positive sign as it speaks to their standing in the business advisory field.
Advice that’s right for your business
If you’ve followed the golden rules but can’t find the R&D tax consultant you’re looking for, don’t give up. We work with a wide range of R&D tax partners that are suitable for businesses with R&D. And there’s every chance we can help you find the consultant that’s right for your company. Don’t hesitate to reach out if choosing an R&D tax consultant is proving problematic. And if R&D finance is on your to-do list, we can help you with that too.
Radium Capital is Australia’s market leader in R&D finance. All eligible business can apply for our Radium Advances. We fund loans of all sizes from a few thousand dollars right up to the tens of millions. It’s quick and easy to apply. With the correct documentation in place, we can approve your Radium Advance and transfer your funds within a few business days.
The application documentation you’ll need for a Radium Advance includes a comfort letter from a Radium approved R&D tax advisor. It details your eligible R&D and estimated R&D tax offset, as well as information about the review the R&D advisor has undertaken. Schedule a call with one of Radium Capital’s R&D finance experts today and learn how we can help your business grow and thrive.