Natural Glow produces quality organic skincare made of the purest ingredients direct from distillers and growers around the world. The company continuously improves its existing ingredients through researching new filtration methods and extraction processes for aromatherapy and skin care. The company uses base ingredients as well as aromatherapy oils to ensure the therapeutic value, safety for use and appeal to users.
Due to the nature of its work, Natural Glow constantly performs R&D activities. For this particular project, Natural Glow believed that new products could be developed by reformulating existing ingredients on the condition that sufficient research and testing was performed to ensure that the products were safe for human use while meeting all the appropriate expectations.
The hypothesis for this experiment was that designing, testing and evaluating various concepts would contribute to a more efficient and effective prototype testing phase.
Natural Glow conducted multiple experiments to try and create top-of-the-line products. It then concluded that such a design was feasible, but needed to be tested to prove the hypothesis.Trials and analysis of data to achieve results that can be reproduced to a satisfactory standard and to test the hypothesis (prototype development and testing of the new product range).
The hypothesis for this activity was that developing and implementing various designed components would allow refinement and tweaking of the final result to achieve the objectives of the project.
Natural Glow’s testing proved that the theoretical conclusions from the design phase could be realised through prototype development and related tests. The new knowledge generated would be used for further iterations of design and development and further field testing.
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.
Natural Glow’s background research included:
The activities conducted during the background research were necessary to support the core activities because they assisted in identifying the key elements of the research project.Ongoing analysis of customer or user feedback to improve the prototype design (feedback R&D of the new product range).
Natural Glow’s qualifying R&D activities for this stage of experimentation included:
These activities were directly related to Natural Glow’s core R&D activities because the feedback was necessary to evaluate the performance capabilities of the new design in the field and to improve any flaws.
To meet the R&D Tax Incentive requirements, Natural Glow 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.
As a company claiming R&D, you always want to be ‘compliance ready’ — meaning if you were audited by the ATO, you could present documentation to show the progression of your R&D activity. Here are some types of documentation that would be beneficial to save: