In December 2019, the government re-introduced a bill to reform the R&D Tax Incentive. The media has reported this week that if the government is successful in passing proposed changes to the R&D Tax Incentive, they would seek that the law be enacted more than 12 months retrospectively: applying 1 July 2019 for the FY20 period.
The revelations arise from statements by ATO and ISA officials to the Senate Economics Legislation Committee during the hearings into the review of the proposed R&D Tax Incentive Reforms.
The bill has been uniformly condemned by Industry Groups and R&D Tax Professionals.
It was however thought that if the bill were to be passed as law, the changes would be more likely to apply for the FY21 period (rather than FY20 as proposed).
Given the widespread financial hardship business is currently facing, many companies have spent recent weeks compiling their FY20 R&D Claims to best ensure that they are able to lodge shortly after the opening of registrations on 1 July 2020. The prospect of a retrospective passing of the proposed R&D Tax Reforms for FY20 is alarming, and exposes companies to undue uncertainty and administrative burden in the event that company tax return amendments for previously assessed FY20 claims are required.