What happens after you lodge an R&D Tax Incentive claim

When you lodge an R&D Tax Incentive claim with your company tax return, it is not the end of the story. What follows can feel opaque if you have never been through the process before. This guide steps through the post-lodgement journey in plain English so you and your accountant know what to expect, what records to keep, and how to prepare for possible reviews. It is general information only, not tax, financial, or legal advice. Always confirm the current rules for your income year with a registered tax agent and check official sources such as the Australian Taxation Office (ATO) and AusIndustry.

GrantsMAX helps Australian businesses prepare a comprehensive, evidence-backed application pack from their own accounting data. That pack is then handed to a registered tax agent or accountant who reviews, refines, and lodges the claim; the business owns the claim at all times. If you have already used the AI Application Pack Drafting and Audit-Ready Evidence Trail, you will be well placed for everything that follows.

Prerequisites: what you should have in place before you lodge

A well-prepared claim makes the post-lodgement phase far smoother. Before you even think about what happens next, make sure you have ticked off these fundamentals:

• Active AusIndustry registration. Your R&D activities must be registered with AusIndustry by the relevant deadline, usually 10 months after your company’s income year end. The registration is the gateway to the R&D Tax Incentive and must cover all the activities included in your claim. Without it, the ATO cannot apply the offset. Read more about registration at business.gov.au.
• Valid company tax return lodged. The claim is made by lodging your company tax return, including the R&D tax incentive schedule, with the ATO. Your registered tax agent will ensure the schedule correctly captures eligible expenditure and that the company’s aggregated turnover is accurately stated. The ATO processes these returns as part of its normal compliance systems. Refer to the official ATO guidance on the R&D tax incentive lodgement process.
• Comprehensive records ready. The ATO and AusIndustry may request evidence to support every aspect of the claim. This includes project plans, contemporaneous notes, timesheets, invoices, and correspondence that demonstrate the nature and cost of the activities. The Audit-Ready Evidence Trail built by GrantsMAX ties each activity and cost line to its source, giving your accountant a clear, defensible pack to stand behind.
• A clear understanding of your claim’s structure. You should know which activities are core R&D and which are supporting R&D, how the expenditure has been categorised (for example, labour, materials, overheads), and which activities have been registered with AusIndustry. This is not just for your own clarity; it is the first thing a reviewer will look at. If you are a founder or CFO, the GrantsMAX for founders and CFOs page explains how the system can help you get this structure right from your accounting data.
• Your accountant is in the loop. As a business owner, you are responsible for the claim, but a registered tax agent performs the review and lodgement. If you have not yet engaged one, GrantsMAX can help you understand the workflow through the Accountant Review & Lodge Workflow.

Pro tip: Do not treat record keeping as an afterthought. Many claims that later face a review are resolved smoothly simply because the business already had a contemporaneous evidence trail. Starting early, ideally during the R&D activities themselves, saves time and stress.

Step 1: The ATO receives your claim and performs initial processing

Once your company tax return is lodged, the ATO’s systems run a series of automated checks. They confirm that your company has an active R&D registration with AusIndustry, that the claim details in the R&D schedule align with the registration, and that the basic arithmetic is correct. If there are any mismatches, for example, a registration number missing or a mismatch in the reported expenditure, the ATO may issue a request for clarification before the return is processed.

At this stage, your claim is not usually selected for detailed review. Most returns are processed and a notice of assessment is issued within standard ATO timeframes, which can vary depending on the complexity of your tax affairs and the ATO’s workload. You can monitor the status of your return through the ATO’s online services for business or through your tax agent’s portal.

It is important to note that the ATO and AusIndustry operate separate but complementary roles. AusIndustry is responsible for assessing whether the activities registered constitute eligible R&D activities under the law. The ATO is responsible for determining whether the expenditure claimed is eligible and for applying the offset. A favourable processing outcome at Step 1 does not preclude a later review by either agency. The OECD’s country profile on Australia's R&D tax incentive provides useful background on how these two agencies interact and the types of evaluations that can occur post-lodgement.

Step 2: Risk assessment and possible review flags

After initial processing, your claim may be run through the ATO’s risk assessment models. These models look for anomalies, unusual patterns, or claim characteristics that statistically correlate with non-compliance. Common signals that could increase review likelihood include:

• Large year-on-year increases in claimed expenditure without corresponding business growth narratives.
• Expenditure categories that appear inconsistent with the industry or type of R&D activity.
• Claims from companies that have previously had adjustments or findings of ineligible expenditure.
• Insufficient or missing information in the R&D schedule.

The ATO does not publish the exact criteria that trigger a review, and being flagged does not mean your claim is wrong. It simply means the ATO has identified it as warranting closer examination. You can get a sense of the areas a reviewer might scrutinise through the Eligibility Assessment & Risk Flags system, which analyses your business data against program rules and surfaces potential red flags before your accountant lodges.

If your claim is not flagged, the ATO will normally finalise it and issue a notice of assessment. If it is flagged, you will receive a request for further information or a formal notification that the claim is under review. The timeline for this can vary from a few weeks to several months after lodgement.

Warning: Not hearing from the ATO quickly does not mean your claim has been accepted. The ATO has amendment periods, generally two or four years depending on the circumstances, during which it can review and adjust a claim. The standard period for review of an R&D claim is four years from the date of assessment for most entities. Always retain your records for at least this period, and consider longer if your circumstances are complex.

Step 3: If your claim is selected for review, what to expect

A review can take two main forms: an ATO review focused on expenditure eligibility, and an AusIndustry review focused on activity eligibility.

ATO review: The ATO will typically send a letter or email (via your tax agent if you have one) requesting specific documentation to support the claimed expenditure. This may include timesheets, invoices, contracts, and evidence that the expenditure was incurred on eligible R&D activities. The ATO may also ask for a detailed breakdown of how costs were attributed and apportioned between R&D and non-R&D activities. Your registered tax agent will manage this correspondence on your behalf. The response must be provided within the timeframe specified in the letter, often 28 days, though extensions can be requested.

AusIndustry review: Separately, AusIndustry may examine whether the activities you registered actually meet the definition of core or supporting R&D activities under the Income Tax Assessment Act 1997. This review can be triggered at any time after registration, even if the ATO has not raised a query. AusIndustry will look at your project documentation, hypotheses, experiments, and outcomes to satisfy itself that the activities were conducted using a systematic progression of work based on established science. You can find a plain-English explanation of what counts as core and supporting R&D on our What is the R&D Tax Incentive? page.

It is possible to face both an ATO and an AusIndustry review simultaneously, and the two agencies may share information. A finding by AusIndustry that activities are not eligible will normally result in the ATO disallowing the associated expenditure. Conversely, satisfying AusIndustry does not guarantee that the ATO will accept all the expenditure.

Step 4: Responding to a review, what to provide

When you receive a review notice, prompt, clear, and well-organised responses are essential. Here is what to gather and how to present it:

• Activity narratives: For each registered activity, provide a concise description of the R&D conducted, the technical unknown or problem you were trying to solve, the experiments or systematic progression of work undertaken, and the outcomes. These narratives should already exist in your claim pack; if you used the AI Application Pack Drafting, they will have been drafted from your data and structured for easy review by your accountant.
• Cost breakdown: Provide a schedule that ties each dollar claimed to a specific activity and explains the basis of allocation. Labour costs, for example, should be supported by timesheets or project time-tracking records that show the hours spent on eligible R&D. Overheads should be allocated on a fair and reasonable basis, consistent with the method stated in your claim.
• Contemporaneous evidence: This can include lab notebooks, meeting minutes, emails discussing technical challenges, design documents, test results, and prototype screenshots. The ATO expects evidence that the R&D activity actually occurred in the income year claimed. The Audit-Ready Evidence Trail indexes these pieces of evidence, making it easier for your accountant to respond quickly and thoroughly.
• Correspondence with AusIndustry: If AusIndustry has already confirmed the eligibility of your registration, include that confirmation. If a review is ongoing, coordinate responses to ensure consistency.

Your registered tax agent will usually draft the response and submit it on your behalf. It is critical that you do not provide information you are not sure about or make claims that cannot be supported. If the ATO identifies inconsistencies, it may lead to a wider audit.

Pro tip: When gathering evidence, label each document clearly and create a master index that maps each piece of evidence to the relevant activity and cost line. This makes the reviewer’s job easier and demonstrates a serious and compliant approach. The indexing approach built into GrantsMAX’s Audit-Ready Evidence Trail follows this exact principle.

Step 5: The outcome, notice of assessment and possible adjustments

Once the ATO finishes its review (or if no review was triggered), it will issue a notice of assessment. This shows the taxable income, any R&D tax offset applied, and the resulting tax position. If the offset results in a refundable amount, the ATO will generally pay the refund to the bank account nominated on your company tax return. For companies eligible for the refundable R&D tax offset (generally those with aggregated turnover below $20 million, unless controlled by exempt entities), this can represent a significant cash infusion. However, the exact turnover threshold and offset rates can change from year to year. Always verify the current-year settings with the ATO’s R&D tax incentive page and your tax agent.

If the ATO adjusts your claim, you will receive an amended assessment. You may have the right to object to the adjustment, and your accountant can guide you through the objection process. The ATO also offers an independent review process for small business taxpayers. Keep in mind that an adjustment does not automatically mean you did something wrong; it often reflects a different interpretation of the legislation or the evidence provided.

For businesses that have claimed the R&D Tax Incentive for the first time, the outcome can set the tone for future claims. The GrantsMAX for first-time claimants page explains how to learn from each claim cycle and improve the evidence base for the next year. The system’s Annual Refresh & Accountant Channel is specifically designed to repeat the claim preparation efficiently each financial year using your latest data.

Step 6: Record keeping for ongoing compliance

The obligation to keep records does not end when the notice of assessment arrives. You must retain all records that support your R&D claim for at least four years from the date of the assessment, or longer if the ATO specifies. For large entities, the requirement can extend further. These records must be readily accessible and in a form the ATO can audit, meaning stored in a secure, organised manner.

Effective record keeping is also your best defence if a later review arises. The ATO can look back at past claims, so keeping files current and well-indexed protects your business. If your books live in Xero, MYOB, or QuickBooks, GrantsMAX for SMBs on cloud accounting explains how the system reads your data (read-only) and builds the evidence pack for each claim year. For small teams that cannot resource a dedicated finance function, the GrantsMAX for small businesses page outlines a practical approach.

For R&D-active startups and technology companies, the documentation burden can feel heavy, but it is manageable with the right habits. GrantsMAX for R&D-active startups and GrantsMAX for technology companies show how to embed evidence capture into your existing workflows so that the annual claim is a natural by-product of your operations, not a frantic retrospective scramble.

Warning: In some cases, a review can arise years after the expenditure was incurred. If key personnel have left the company or files have been lost, responding becomes much harder. The ATO’s position is clear that the onus of proof rests with the taxpayer, not the ATO. So treat record retention as a non-negotiable part of running an R&D-active business.

Conclusion: key takeaways and next steps

After you lodge an R&D Tax Incentive claim, the process does not stop. The ATO and AusIndustry each have the authority to review your claim, sometimes years later. A smooth post-lodgement experience comes from preparation before you lodge: a clear understanding of your eligible activities, a robust evidence trail, and a registered tax agent who reviews the claim and serves as your point of contact.

To summarise:

• The ATO processes your return and may select it for review based on risk models; most claims are not reviewed, but you should always act as if they could be.
• AusIndustry can separately examine your activity eligibility at any time.
• Responding to a review requires organised, contemporaneous documentation; response times are short, so having everything in one place is critical.
• The outcome is a notice of assessment, which may include a refund or an adjustment; you have objection rights.
• Retain all records for at least four years, and keep an evidence trail that ties each cost to an activity.

At GrantsMAX, we focus on what happens before you lodge: preparing a complete, evidence-backed pack so your accountant can review and lodge with confidence. We do not file, guarantee, or maximise claims; the business owns the claim and the accountant remains in control at every step, as shown in the Accountant Review & Lodge Workflow. If you want to learn more about how to get your claim pack ready without months of manual effort, visit the GrantsMAX documentation or read our Blog for practical updates.

Ready to get your next claim pack in shape, well before the lodgement deadline? Join the GrantsMAX waitlist today and be among the first to try the platform built to give your accountant a head start.