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Media reports of large R&D Tax Dispute for ASX-listed agribusiness company

Media reports have emerged this week of a multi-million-dollar tax dispute for R&D Tax Incentive claims made by Inghams Group Limited.

The ABC has reported that:

• The company’s potential claim totals more than $50 million in taxpayer funds — which, in the context of $11.2 billion given out through the entire ATO program in 2021-22, is far from chickenfeed.
• It is understood to be about tax incentives claimed for research and development (R&D) around feed the animals eat.
• The tax office did not respond to specific questions about the Ingham’s dispute, saying it could not comment on the tax affairs of any individual or entity due to “statutory confidentiality obligations”. In a statement it said, while companies self-assess their eligibility for R&D claims, “the ATO has sophisticated systems in place to identify possible non-compliance with the R&DTI [R&D Tax Incentive] program”.

Inghams Group Limited’s Interim Annual report released in February 2025 noted that:

• Inghams has been undergoing an audit by the Australian Taxation Office (‘ATO”). The ATO has asserted that Inghams’ R&D tax offset claims require adjustment under the Income Tax. Assessment Act 1997 for each of the income years 2019, 2020 and 2021 (the adjustment is approximately equal to the offset claimed of $8.5m in each year). The R&D expenditure claimed would remain subject to the normal tax deductibility rules already applied. R&D claims for income years 2022, 2023 and 2024 have not yet been submitted in Inghams’ tax returns as there are further substantive steps including registrations and certifications required to complete the scope and measurement process. These matters are unrelated to the ATO position with respect to the 2019, 2020 and 2021 tax returns.
• The accounting position involves significant judgement in the interpretation and application of the R&D offset provisions In the Income tax laws and estimation uncertainty, however, is supported by advice obtained from the Company’s tax advisors. Inghams Intends to vigorously defend its position and contest the matter through litigation proceedings, if required
• Based on information available there is no change to the position from 29 June 2024 and Inghams does not consider it probable that the Company’s Income tax assessment will be amended in relation to this matter and no uncertain tax provision was recognised as at 28 December 2024.

Swanson Reed does not have any inside information about the matter nor know the specifics of the Ingham’s dispute.

We note that it has been relatively quiet in terms of high profile R&D Tax disputes reported in the media over recent years. Between 2017 and 2020 there were a number of high profile R&D Tax disputes reported, however anecdotally reports of R&D Tax disputes seemed to have reduced since 2020.

This is a timely reminder that R&D Claims must be compiled and assessed with care, and that claimants should consider and apply guidance material published by AusIndustry and the ATO on R&D Tax Compliance.

Please get in touch with our office if you require assistance, would like to speak to someone about a potential claim, or check out our website for more information.