ATO and AusIndustry R&D Tax Incentive Reviews
Understanding the review process, what triggers scrutiny, and how to respond with confidence.
What Is an RDTI Review?
The R&D Tax Incentive is jointly administered by AusIndustry and the ATO. Either agency can review your claim at any time, during processing, after refund, or years later. A review is not an accusation of wrongdoing. It is a compliance check to verify that your registered activities and claimed expenditure meet legislative requirements.
The ATO reviews approximately 20-30% of all R&D claims, with particular attention to first-time claimants, high-value claims, and software/AI-related R&D.
What Triggers a Review
Common triggers include:
- First-time claims (higher scrutiny by default)
- Claims that are disproportionately large relative to company size
- Software or AI claims where technical uncertainty is unclear
- Vague or generic activity descriptions in AusIndustry registration
- Claims where 100% of salary costs are allocated to R&D
- Claims lodged near or after deadlines
The Review Process
Notice Received
The ATO or AusIndustry sends a formal notice requesting additional evidence and documentation about your registered activities and claimed expenditure.
Response Period
You typically have 28 days to respond. Extensions may be granted if requested in advance with reasonable cause.
Evidence Assessment
The reviewing agency assesses your evidence. They may request further clarification, interviews with technical staff, or site visits.
Outcome
Your claim is either approved as lodged, adjusted (reduced), or disallowed. You have rights to object and appeal if you disagree with the outcome.
What Reviewers Look For
- Evidence of hypothesis-driven experimentation (not just development)
- Technical documentation created during R&D (not after the fact)
- Clear link between expenditure and registered R&D activities
- Timesheets or records showing time allocation to R&D
- Evidence that outcomes were genuinely uncertain at the outset
- Records of failure, iteration, and refinement
How We Support Review Defence
Whether you prepared the original claim yourself, through another advisor, or through us, we can help you respond to a review. See our claim process guide for how we build claims from the start, or learn more about working with us.
Pre-Review Preparation
We build every claim as if it will be reviewed. Documentation, evidence trails, and technical narratives are prepared from day one.
Active Review Response
We prepare formal responses on your behalf, gathering additional evidence and presenting technical justification aligned with legislative requirements.
AusIndustry Engagement
We manage communications with AusIndustry, ensuring responses are timely, complete, and professionally presented.
ATO Correspondence
We work with your tax agent to respond to ATO queries about expenditure allocation and offset calculations.
Prevention Is Better Than Defence
The best review defence is a well-prepared claim. We design every claim assuming review will occur, so when it does, your documentation and evidence are already in order.
We design claims as if they will be reviewed, even when they never are.
Get in Touch
Facing an ATO review or want to ensure your claim is audit-ready? Contact us to discuss your situation.