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What is record keeping?

In the context of the R&DTI program, record keeping is the systematic process of collecting and maintaining information relating to your R&D activities and their associated expenditure.

Records should be created at the time the activity is conducted, to ensure the most accurate and comprehensive information is included.

Why record keeping matters

Under the R&DTI you must keep records of your R&D activities and related expenditure.

Maintaining clear and accurate records helps you self-assess whether your activities and expenditure meet the R&DTI’s eligibility requirements.

Records also ensure you can demonstrate eligibility if the Department of Industry, Science and Resources (the department) reviews your application or the Australian Taxation Office (ATO) reviews your tax offset claim. If you cannot demonstrate the eligibility of your R&D activities for the R&DTI, you are not entitled to claim the R&D tax offset for those activities.

When applying for the R&DTI, you must declare that:

  • the information provided in your application is complete and correct
  • you have maintained appropriate records while conducting your activities
  • the activities and expenditure described in your application meet all eligibility requirements for the program.

How to keep good records

Companies should choose the record keeping systems and formats that best suit their needs and operations. Information on how to establish and maintain a record keeping system that suits your business can be found on our record keeping page.

You need to keep your R&D records for 5 years after claiming your expenditure.

The following recommendations are for record keeping strategies that support accurate registration and claims for the R&DTI.

Set up your record keeping system before starting your R&D activities

Establishing a record keeping system before conducting R&D activities ensures you have a consistent approach to capturing information that meets the requirements of the R&DTI.

This approach also allows you to keep records as activities and expenditure occur – from planning and conducting the activities to claiming the tax offset. The most accurate records are created at the time the activities are conducted, because they capture information that may otherwise be forgotten or overlooked.

Keep records that link your R&D activity to the related expenditure

You should maintain clear and accurate records of the R&D activities you conduct and how the costs incurred relate to those activities.

Under the R&DTI, your records should show:

  • background research to determine that outcomes of R&D activities could not be known in advance
  • details of the R&D activities performed, including:
    • what was done – the steps, test trials or development activities undertaken
    • how the work was performed – the methods, processes and approaches used
    • when the work occurred – the dates and timelines
    • who carried out the work – the staff members and contractors involved
  • resources used in R&D activities and how they were used, including:
    • facilities
    • equipment
    • tools
    • materials
  • related expenditure incurred, including:
    • what it was on
    • how much was incurred on the R&D activity
    • who incurred it
    • when the costs were incurred
    • which R&D activities the expenditure relates to, ensuring a clear link between costs and eligible activities
    • documents that support any apportionment methods used
    • how you have calculated adjustments.

Examples of records that show your activities and expenditure are eligible

Below are examples of records that may be used to demonstrate that your activities meet the requirements of a core or supporting R&D activity.

These are examples only and this is not an exhaustive list. Records come in many different forms – the most important thing is the information that they contain.

Examples of records that could be kept for core R&D activities

Core R&D activity Records

Evidence that the activity involves an outcome that cannot be determined in advance and that experiments need to be conducted
  • Emails, letters or reports from an expert indicating that current knowledge cannot determine the outcome being sought
  • Background research indicating gaps in current knowledge
Evidence that a systematic progression of work (hypothesis, experiment, observation, evaluation and conclusion) was followed
  • Experimental plans
  • Records of trial runs
  • Test reports that show the results and evaluation
  • Contracts or research agreements

Evidence that the activity was conducted for the purpose of generating new knowledge
  • Meeting records (e.g. minutes, transcripts, summaries, recordings)
  • Email correspondence
  • Project plans
  • Expenditure approval requests outlining the purpose for undertaking the activity

Examples of records that could be kept for supporting R&D activities

Supporting R&D activity Records

Evidence that the activity is directly related to the core R&D activity
  • Meeting records (e.g. minutes, transcripts, summaries, recordings)
  • Emails
  • Experimental plans

Evidence that the activity was conducted for the dominant purpose of supporting a core R&D activity (if applicable)
  • Meeting records (e.g. minutes, transcripts, summaries, recordings)
  • Experimental or project plans showing that supporting R&D activity is needed in conducting the core R&D activity
  • Expenditure approval requests outlining the purpose for undertaking the activity

Further information

The Guide to interpretation provides further examples of records that may demonstrate your R&D activities are eligible.

You can learn more about record keeping and apportioning R&D expenditure from the ATO’s keeping records and calculating your notional deductions page.