Research & Development (R&D) Tax Incentive FAQ


The R&D Tax incentive scheme replaced the R&D tax concession scheme on the 1st of July 2011.

Some questions have been posed regarding the application of the scheme that we have listed below.

Deductibility of Expenditure

I have registered under the R&D Tax Incentive scheme. Can I claim some of my R&D expenditure under a different section of the Income Tax Assessment Act?

Under the previous R&D concession scheme, you were able to choose to claim a deduction under a different provision. However, under the new R&D Tax Incentive scheme, you cannot choose.

Payments to Associates

Under the R&D Tax Incentive, I can only obtain an R&D tax offset for expenses paid to an associate if it is ‘paid.’ I have issued a cheque on the 30th of June, but it was banked on 2nd of July. Does this constitute payment?

A cheque is considered to be paid when a recipient receives it. If it is promptly banked, then it helps demonstrate the cheque was received on the 30th of June. However if a significant delay occurs in banking the cheque, then the ATO will consider it paid when it is presented and cleared.

Can a journal entry between entities constitute payment?

In a word, no.

Are there any other guidelines with what constitutes a payment?

An amount ‘paid’ has its general legal meaning. There are a number of ATO interpretive decisions, rulings, and cases that can be used to ascertain the meaning in your particular circumstances.

What to do next

If you are claiming R&D Tax concessions, we engage an expert R&D consultant to assist in the preparation of the claim. The best advice is to start the process early, as delays in refunds are often 6 weeks to 3 months in duration.


Hillyer Riches are Melbourne Accountants practice. Contact us today or email

This article is for general information only and should not be relied upon without first seeking advice from an appropriately qualified professional.

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