Is being recognised as a Significant Performer right for me?
The Significant Performer option is suited to businesses that are undertaking a large number of core R&D activities. Electing to become a Significant Performer saves companies from having to seek General Approval for each of their R&D activities, which reduces their associated RDTI compliance and administrative costs while still giving them a degree of certainty around the eligibility of their R&D activities.
Companies with large, established R&D functions may find it easier to integrate RDTI requirements into their existing processes for project management and financial reporting. These companies may also decide that the effort to gain and maintain CAM approval more than outweighs the effort required to submit multiple general approval applications. Companies need to be confident that they fully understand the RDTI Tax Legislation and have the systems to self-assess correctly.
If this sounds like you please contact the RDTI team to talk about becoming a Significant Performer.
What is the process for CAM approval?
As a Significant Performer you can choose to use the separate CAM process for either:
- all of your R&D activities
- some of your R&D activities (and apply for General Approval for your other projects not covered by the CAM application)
- none of your R&D activities, instead, applying for general approval for all your R&D activities.
CAM approval can cover R&D activities over a period of up to 3 years.
Here's an example of how to make a CAM claim for the 2020/2021 income year:
Submit your RDTI application for Criteria and Methodologies (CAM) approval
If you choose to claim the RDTI as a Significant Performer, you will need to submit a CAM application by the 7 day of the 2nd month after the end of your income year. If you are a business with a tax agent and a standard balance date (which means your income year ends on the 31 March), this would be the 7 May 2021.
The timeline below uses this example to show the steps to claim:
2020/2021 example for a Significant Performer with a tax agent and a 31 March income year end
- If your business does not have a tax agent’s extension of time, the date for submitting the tax return is usually 7 July 2021 for the 2020/2021 income year.
- Does your business have a different income year end? Click here for examples of your key dates.
- NOTE: an extension of time may be granted if you don’t have one, please contact the RDTI team before your income tax return is due.
What does the application for Criteria and Methodologies (CAM) approval look like in myIR?
If you have enrolled for the RDTI, you will find the application for ‘Criteria and Methodologies’ (CAM) approval in your myIR account. You will be required to submit details about your:
- estimated eligible R&D expenditure
- significant performer election
- associated parties
- R&D activities and governance
- accounting and expenditure
- contact details
- Preview the myIR screenshots here, to help you prepare your submission. Note that this preview is a guide only – your application for Criteria and Methodologies (CAM) approval must be electronically filed in myIR.
- Check out the guidance for completing your application for Criteria and Methodologies (CAM) approval on IR’s website.
- Still have questions? Contact the RDTI team.
Submit any applications for General Approval (GA) which will not be covered by the CAM
You will need to remember to submit an application for general approval (GA) for any core and supporting R&D activities that you do not include in your CAM application. Any general approval applications need to be submitted at the same time as your CAM application. Find out how to submit an application for general approval (GA).
Complete the CAM approval process
After you have submitted your CAM application, you can expect the following to happen:
- An IR case manager will contact you to arrange an initial discussion about your CAM approval.
- You will be asked to complete a CAM documentation workbook.
- IR will assess the information you supply in the workbook and give feedback, either in person or in writing.
- You will then be asked to provide a list of eligible activities for the first year of the CAM.
- IR will request a detailed submission on a selection of these eligible activities (typically 3-5 activities).
- You will need to demonstrate in your submission how you have applied your R&D criteria and methodologies to identify activities and decide the eligibility of activities.
- Once IR is confident that they understand your R&D criteria and methodologies, they will make a decision on whether your CAM application is approved.
Submit your 2020/2021 Income Tax Return
Once you have obtained CAM approval, the next step comes at the end of the year when you prepare your income tax return in myIR. Your income tax return will include a few extra fields to allow you to calculate the amount of income tax payable, as the RDTI is a tax credit that reduces the total amount of income tax that you owe.
If you are a business with a tax agent and a standard balance date, your 2020/2021 income tax return will be due on 31 March 2022, as shown in the above example.
Submit your Research & Development Supplementary Return and R&D Certificate
The final step in the process is the submission of your RDTI supplementary return. If you have enrolled for the RDTI, you will find the ‘Research and Development Supplementary Return’ in your myIR account (it must be filed electronically).
The supplementary return requires you to provide details about the money you spent on your eligible R&D activities. You will need to supply the amounts for different expenditure types like salary costs, contractor costs and depreciation.
What does the RDTI supplementary return look like in myIR?
- Preview the myIR screenshots here, to help you prepare your submission. Note that this preview is a guide only – your RDTI supplementary return must be electronically filed in myIR.
- Once you have received a CAM approval a separate tab on the supplementary return will be available to you and any associated parties covered by the CAM agreement to enter the R&D expenditure.
- Associated parties that wish to claim their share of the credit will need to enrol for the RDTI and file their own supplementary return.
- Still have questions? Contact the RDTI team.
Include an R&D certificate with your supplementary return
Along with your supplementary return, you must also supply an R&D certificate from an approved R&D certifier. As an approved CAM applicant, you are required to engage an approved certifier to perform an annual certification of your R&D expenditure. An R&D certificate provides IR with reasonable assurance that you have complied with the R&D requirements set out in your CAM agreement. Find an authorised R&D certifier here.
The supplementary return, along with your R&D certificate, can be filed up until 30 days after your income tax return – in the above example that is 30 April 2022. However, it is recommended that you file early to avoid missing the deadline.