Strike Energy (ASX:STX) Reports Receipt of $8M R&D Tax Offset in FY21 Annual Report Following Dispute Settlement

November 16th, 2021

Strike Energy previously disclosed R&D Tax Offsets in dispute with Innovation & Science Australia (ISA) in respect of the FY16 period of $6,333,638 which also had subsequent implications on R&D Tax Offsets in the FY17 period of $3,697,000.

Subsequent announcements to the ASX in following initial disclosure of the dispute indicated that:

  • The matter was before the Administrative Appeals Tribunal (AAT);
  • The company was confident in their position and the eligibility of their claims;
  • Strike Energy then announced to the ASX on 27 August 2020 that:
    • (1) A positive settlement with ISA has been reached in respect of the claims under review;
    • (2) As a result of the settlement reached, the company will proceed with a claim for the FY18, FY19 and FY20 periods.

The company’s FY21 Annual Report released in September 2021 indicates that:

  • The company has disclosed receipt of a R&D Tax Offset refund of $8.784M during the FY21 period within its cashflow statement relating to prior year claims settled and paid out during FY21;
  • The company appears to have continued to register R&D activities in recent years (subsequent to the years in dispute) and attained R&D offsets of a lower magnitude than the periods that were in review. This is consistent with an ASX announcement in December 2020 that the company was about to finalise a FY20 claim;

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

The settlement also follows positive (or partially positive) R&D tax dispute settlements reached by Argent Minerals (ASX: ARD) and Northern Minerals (ASX: NTU) over the past couple of years.

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.

Post a Comment

(*) indicates required field.

Categories

Archives

    Email this job