Airtasker has previously been associated with the “compliance crackdown” on R&D Tax Incentive claims, particularly for software, after reports emerged in December 2018 that the company’s prior year claims were being disputed following ATO review.

Airtasker’s dispute came around the time of other reported R&D tax disputes whereby companies such as CBA and Newcrest made disclosure of reduction to previously lodged self assessed R&D claims.

Since this time, Airtasker has completed a successful IPO, and has provided an update to the ASX on the R&D tax dispute within the FY21 results released today:

• “The group is currently in dispute with the ATO in relation to its R&D Tax Offset incentive claimed for the years ended 30 June 2015 and 30 June 2016, which total $1,962,000. The balance of government grants provisioned as at 30 June 2021 has reduced compared with 30 June 2020, reflecting R&D Tax Offset incentive claims received by the group during the year ended 30 June 2021 in respect of the years ended 30 June 2017, 30 June 2018, 30 June 2019 and 30 June 2020, which were received by the group as an offset against the existing liability”.

Hopefully Airtasker and the ATO can reach an amicable settlement of the disputed claims for the FY15 and FY16 claims. It is a good outcome that Airtasker has been able to continue to register R&D activities and report entitlements in respect of periods subsequent to this disputed period, and Airtasker’s continued use of the R&D Tax Incentive should be highlighted as a positive development for Australian R&D Tax Incentives.

The widely reported crackdown on software development activities under the R&D Tax Incentive did indeed occur during the period of approximately February 2017 to late 2019. We have however noted that in recent times, compliance processes for R&D claims have become reasonable. We note that:

• AusIndustry (who jointly administer the programme and make findings on eligibility) announced in November 2019 that they were overhauling their compliance frameworks to enhance the programme for participants;
• A number of companies whose claims were previously ruled as ineligible (including ASX listed Software company Xped, Monadelphous and several ASX resource companies) have been successful in challenging and reversing adverse eligibility assessments;
• Additional guidance has been published by the regulators, and there have been few reports of disputed claims lately.

The past 5 years has been a tumultuous period in the history of the Australian R&D Tax Incentive, where the programme was subject to a number of actual and proposed changes to legislation and eligibility interpretations. Hopefully, the programme is heading in a positive direction and a period of stability will prevail. Whether this remains will be up to companies, advisors and regulators acting in good faith, and assessing claims in accordance with the letter and spirit of the law.