EOFY R&D Tax Incentive Considerations

The end of the financial year is once again here, and it brings with it some important considerations. If you’re planning to lodge an R&D Tax Incentive claim for FY25, now is the time to check in with your advisors and ensure you're across a few key issues before 30 June. We’ve outlined the most important ones below.

Advance Findings

If you’re unsure whether your planned or ongoing R&D activities are eligible under the R&D Tax Incentive, an Advance Finding can provide valuable upfront clarity. It’s a binding determination from the regulator confirming whether your activities qualify for an R&D Tax Incentive and is especially useful for long-term or complex projects, first-time claimants, or where eligibility is uncertain.

To be valid for FY25, applications must be lodged by the end of your income year. There are no extensions or exceptions for late applications. You can read more in our article, The Pros and Cons of Advance Findings for the R&D Tax Incentive.

Overseas R&D Activities

Expenditure on overseas R&D activities can only be claimed in specific circumstances. Most critically, to claim any eligible overseas R&D activities in FY25, an Overseas R&D Finding needs to be prepared and lodged by the end of the income year.  Missing this deadline means you will not be able to claim expenditure on eligible overseas activities for FY25.

For guidance on how to approach this process, see our article, How to Successfully Navigate the Overseas Finding Process for R&D Tax Incentives.

Payments to associates

R&D expenditure that is incurred to an associate can only be claimed for R&D tax purposes to the extent that these amounts are paid as at 30 June 2025. As such, it’s important to ensure that costs incurred to associates are paid prior to EOFY if you intend to include these amounts in your upcoming FY25 R&D tax claim.

In broad terms, associates are those individuals or businesses that, because of family or business connections, might appropriately be regarded as being associates.

Documentation

It’s important ensure that your documentation is in good order for substantiating any major FY25 R&D activities. Contemporaneous records (i.e. records prepared and collated in preparation for and as R&D activities are being undertaken) should be in place and easily accessible at the completion of FY25 to provide evidence for an upcoming R&D tax claim.

We can provide customised R&D documentation recommendations and are conducting documentation workshops with clients to ensure they continue to be able to meet the expectations of regulators when it comes to evidencing their annual R&D activities and costs.

Prepaid expenses

Review the rules around prepaid expenses to determine if they can be included in your R&D claim. Prepaying certain expenses before 30 June might be beneficial, but it's important to understand the specific requirements and limitations that apply.

 

Contact your friendly neighbourhood R&D tax advisers at Intellect Labs if you need help prior to 30 June, or if you’re keen to put together a FY25 claim early in the new financial year.

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