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Northern Minerals Ltd Receives Balance of Previously Disputed R&D Tax Offset

Northern Minerals Ltd had previously reported in May 2019 a significant liability in respect of R&D Tax Incentive claims for expenditure developing its Rare Earth processing capability.

It was subsequently reported in August 2020 that the company had settled the dispute with the ATO relating to claims in the FY17 and FY18 periods, along with an agreed framework for claims in the FY19 and FY20 periods.

The settlement reduced the original refundable R&D Offsets for FY17 and FY18 periods by $21,309,237, however since a large portion of the claim had not been paid out by the ATO, the agreement provided a forthcoming receivable to the company of approximately $10M.

Northern Minerals Ltd has now announced to the ASX that the net amount outstanding has been refunded by the ATO, and has been applied to reduce debt and progress the company’s Pilot Plant.

The above is a good outcome for the company, considering that when companies’ activities reach the stage of a negative finding and AAT dispute, compliance proceedings can be difficult to settle or overturn.

This is a reminder that R&D Claims must be compiled and assessed with care, and that claimants should carefully adhere to R&D Tax Compliance guidance published by AusIndustry and the ATO.