Small businesses claim half of Australia's R&D tax refunds but face audit
Small businesses claim half of R&D tax refunds but face frequent audits and surprise bills.
Australia's R&D tax incentive (RDTI) encourages businesses to invest in new ideas, though the scheme has created what tax advisers call "audit hell." The Australian Taxation Office checked R&D claims each year from 2017-18 to 2019-20.
Between 73 and 81% of those claims had to pay extra tax later. Small businesses make up 51% of companies using this scheme.
They face real risk. They can spend years building products using RDTI refunds.
Then they may be ordered to repay the money years later. The repayment includes penalties and interest.
BindiMaps is a tech company with wayfinding software used at the Australian Open. It went into administration in September 2025.
A second ATO audit left it unable to pay a surprise tax bill. Tax advisers blame changing rules about what counts as R&D and unclear rules about what paperwork the ATO will accept.
This leaves businesses unable to invest with confidence.
- 51 percent of users
- Small business share
- 73 to 81 percent hit with bills
- Audit compliance rate
- 16.7 billion dollars in 2023-24
- R&D spending reported
- September 2025
- BindiMaps administration
Why it mattersHundreds of small Australian companies rely on this scheme. Unclear rules and surprise audits can use up their cash reserves or force companies into administration.
AustraliaAustralian startups and small tech firms face unpredictable tax liabilities that discourage R&D investment; the government plans to narrow the scheme from July 2028 while stepping up enforcement.
✓ Claims checked against the source. checked 2 h ago
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