Subsequent announcements to the ASX in following initial disclosure of the dispute indicated that:
- The matter was before the Administrative Appeals Tribunal (AAT);
- The company was confident in their position and the eligibility of their claims;
- Strike Energy then announced to the ASX on 27 August 2020 that:
- (1) A positive settlement with ISA has been reached in respect of the claims under review;
- (2) As a result of the settlement reached, the company will proceed with a claim for the FY18, FY19 and FY20 periods.
The company’s FY21 Annual Report released in September 2021 indicates that:
- The company has disclosed receipt of a R&D Tax Offset refund of $8.784M during the FY21 period within its cashflow statement relating to prior year claims settled and paid out during FY21;
- The company appears to have continued to register R&D activities in recent years (subsequent to the years in dispute) and attained R&D offsets of a lower magnitude than the periods that were in review. This is consistent with an ASX announcement in December 2020 that the company was about to finalise a FY20 claim;
The above is a good outcome for Strike Energy, considering that when companies’ activities reach the stage of a negative finding and AAT dispute, compliance proceedings can be difficult to settle or overturn.
The settlement also follows positive (or partially positive) R&D tax dispute settlements reached by Argent Minerals (ASX: ARD) and Northern Minerals (ASX: NTU) over the past couple of years.
This is a reminder that R&D claims must be compiled and assessed with care, and that claimants should carefully adhere to R&D tax compliance guidance published by AusIndustry and the ATO.
