State Reference Group (SRG) meetings
Summary of Outcomes
Dates and Participation
State Reference Group (SRG) meetings were held in April 2017 with participants from tax
consultancy firms, the Department of Industry, Innovation and Science (the department) and
the Australian Taxation Office (ATO).
The dates, location and the number of participants at each meeting were as follows:
Date
5 April 2017
Location
Sydney
Participants
22
5 April 2017
Melbourne
19
6 April 2017
Brisbane
15
6 April 2017
Adelaide
8
11 April 2017
Perth
16
Summary of Outcomes
Programme performance snapshot



2014/15 income period saw more than 15,000 companies registered with R&D
expenditure of $17.93 billion.
Strong growth trends in small to medium size enterprise (SME) participation and
registered R&D expenditure by SMEs noticeable.
ICT-related research and development is most prominent; 45% of companies and
around 35% of registered R&D expenditure.
Feedback on the Taxpayer Alerts
The department and ATO noted in February 2017 they released taxpayer alerts about
claiming the R&D Tax Incentive for construction activities, ordinary business activities,
agricultural activities and software development activities. The department and the ATO
highlighted the alerts will help program participants with their claims.
SRG participants advised taxpayer alerts had been sent out to clients; established clients were
not necessarily concerned by the information, new clients were more cautious. Tax
consultants saw it as their role to inform clients on the nature of the alerts.
Overall reactions to the taxpayer alerts was generally positive with most expressing support
about the intent of these products and most participants agreeing that they were useful
reference documents. Some concerns were noted about the taxpayer alerts and guidance
materials that some terms could flag companies for review and issues related to interpretation
and application of the legislation. The SRG participants requested the department consider
more detailed case study examples and guidance on record keeping.
SRG participants recommended that there should have been more promotion of the release of
the amended version software taxpayer alert to minimise confusion.
Feedback on Advance and Overseas Finding form
The department noted the new online advance and overseas finding form was released in
January 2017. Most applications are lodged at the end of June.
SRG participants provided some feedback about its usability and the changes made to the
form.
 Initial feedback suggested that it was still not overly user friendly.
 There was a suggestion that there just be a ‘submission for an advance or overseas
finding’ with the basic information and follow this up with a face-to-face interview.
 A 30 day time limit on the form remaining active when the form is saved to the
desktop was seen as an issue.
The department agreed to consider these suggestions.
Guidance
The department provided an overview of a project it has to determine ways to provide better
guidance on the R&D Tax Incentive, with the initial focus areas of start-ups and ICT claims.
SRG participants provided their insights into some common areas of confusion.

There was some concern that additional guidance for start-up companies may add
confusion as they should not be seen as a separate audience. However the SRG
participants noted startups do not have the resources and are time poor, unlike other
larger businesses.

There was overwhelming support for more real examples such as case studies on
eligible software development activity in ICT and for other sectors.
Some suggestions for enhancements included an ICT specific form which is in
language understood by ICT companies and highlights risk areas upfront and a ‘chat
channel’ on business.gov.au where companies can get tailored advice.

The department undertook to feed these insights into the discovery process of its guidance
project.
ATO expenditure mistakes
The ATO highlighted some common expenditure mistakes related to payments to associates,
aggregated turnover, record keeping, expenditure to specific activities and methodology used
for calculating percentage of total costs.