Link Logistics (Link) is a world renowned vehicle-telematics designer and supplier. Link is constantly conducting research and development work to continue providing its clients with innovative solutions.
There are many legislated operational items that transport operators must comply with, including on-board mass limits, driver-fatigue restrictions and speed requirements. The parameters of these items are strictly defined and differ from state to state or zone to zone; therefore, up-to-date on-road compliance must be monitored accurately.
Link’s goal was to deliver a complete compliance solution. Link launched an R&D project with the following hypothesis:
“A multi-function, in-vehicle computing platform can be designed and developed to improve the processes that ensure transport operators comply with, and operate within, legislative requirements.”
Link needed to determine the eligibility of its proposed R&D activities in order to know if it qualified for the R&D Tax Incentive. Once Link identified the specific activities that qualified as R&D, it needed to assess whether each activity was a core or supporting R&D activity. After self-assessing, Link decided to register two core activities and two supporting activities.
The hypothesis developed for this core activity stated,
“It is feasible to design the business logic underlying an in-vehicle platform to improve compliance processes for various transport operators.”
Because the technology industry is constantly evolving, it was critical for Link to remain knowledgeable in this field through ongoing research.
Link engaged in numerous experiments, mainly consisting of coding, and continued to test the platform designs created in its next R&D phase.
Link’s hypothesis for this core activity was that the theoretical conclusions from the design phase could be realised through comprehensive analysis and valid testing.
After much experimentation, Link concluded that the results were overall positive and did indeed prove that the platform could be developed. Link confirmed that it would use the new knowledge generated for further research and development work, which could lead to iterations of the design.
Hypothesis Defined AusIndustry recognises a hypothesis as a statement or proposition about what result is expected if certain conditions are put in place and certain actions are carried out in an experiment. It can range from an assumption or proposition to a theory, but it must establish the experimental activity and form part of a broader systematic progression of work undertaken by the company. It must be evident that the claimed experiment has been designed to test the hypothesis.
If the outcome of an activity can be obtained without a hypothesis, then the activity will not be considered R&D.
Link conducted the following experiments during its research phase:
These specific research activities were directly related to and supportive of Link’s core R&D activities because they assisted in determining the fundamental elements of the research project.
Link’s supporting R&D work included:
These supporting activities were directly related to Link’s core activities because the feedback was imperative to evaluate the performance capabilities of the new design in the field and to improve any flaws in the design.
To meet the R&D Tax Incentive requirements, Link had to save documents that outlined what it did in its core R&D activities, including experimental activities and documents to prove that the work took place in a systematic manner. Link saved the following documentation:
By having these records on file, Link confirmed that it was ‘compliance ready’ — meaning if it was audited by the ATO, it could present documentation to show the progression of its R&D work.