Engineering contractor Monadelphous has released its FY19 annual report this week, and within recognised a $7 Million provision relating to repayment of R&D Claims for the FY15 and FY16 periods. The provision would indicate that the underlying disputed R&D Activities may have R&D Expenditure of around $70 to $80 Million.
Monadelphous had previously reported to the ASX in May 2019 that the company had received notices of amended assessments from the ATO relating to findings by Innovation Australia that R&D Activities registered in the FY15 and FY16 periods were not eligible. Within this release, Monadelphous noted that the company had applied to Innovation Australia to undertake an internal review of the previous finding.
Where a company receives a finding that activities are not eligible by Innovation Australia (usually received following an AusIndustry examination of a registration) a company can apply for an Internal Review of the finding decision. An Internal Review will confirm, vary or set aside the original Finding. Where the company disagrees with an Internal Review decision, it can then apply to the Administrative Appeals Tribunal (AAT) for a further review of that decision. The AAT can provide an independent review of decisions made by the Australian Government agencies.
The above is a timely reminder that R&D Claims must be compiled and assessed with care, and that claimants should consider guidance material published by AusIndustry and the ATO on R&D Tax Compliance. For more information on your eligibility click here to contact us.