Scaling an R&D tax practice: where adviser hours go

01What limits how many R&D clients a practice can take on?

For many R&D tax practices the limit is less often technical expertise than the adviser hours spent gathering evidence: interviewing engineers after year-end, chasing timesheets, and rebuilding the link between cost and activity. Each new client adds that work again, so the practice grows only as fast as its people can collect and check records.

The workload follows from how the R&D Tax Incentive (RDTI) is designed. It is a self-assessment program, and the ATO says self-assessment "requires evidence that substantiates that each and every part of the legislative requirements are met" (ATO — Helping you get R&D claims right). For every claim, someone has to assemble:

• background research showing the outcome could not be known in advance
• what was done, how, when and by whom
• the related expenditure, and which R&D activity each cost relates to
• support for any apportionment methods and adjustments.

That list is from business.gov.au's record-keeping guidance. When the client has not kept these records during the year, the adviser's first job each season is to find or rebuild them — before any judgement about eligibility can start.

02Why does evidence collection take so many adviser hours?

Because the facts an adviser needs are spread across a client's tools and people, and the hardest ones — time on each activity, and failed experiments — fade fastest. The ATO requires time spent by researchers and technicians to be substantiated, and says documents created after the fact will generally not be adequate on their own.

Three items tend to drive the chasing:

1. Time. Companies "must substantiate the time spent on eligible R&D projects" by the people doing the work (ATO — Keeping records and calculating your notional deductions). Rebuilding hours from memory months later is slow, and the result is weaker evidence.
2. The link from cost to activity. The ATO prefers that record keeping tracks expenditure to R&D activities on a "real time" basis, with apportionment used only in limited situations. Where that tracking does not exist, the adviser has to build and defend an apportionment method instead.
3. Contemporaneity. The ATO says documents created after the fact "will generally not be adequate on their own without some contemporaneous records" (ATO — Helping you get R&D claims right). An adviser can draft a strong narrative at year-end, but cannot create the dated records underneath it.

None of this is avoidable in the law. What changes between practices is when the work happens and who does the first pass.

03What does the Tax Agent Services Act require of R&D advisers?

Assisting clients with R&D tax concessions, where it involves applying tax law, is a tax agent service. Charging for it requires TPB registration, and registered agents must meet the Code of Professional Conduct — including competence, reasonable care, proper client records and, since 2025, a documented quality management system.

The Tax Practitioners Board lists "assisting clients with tax concessions for expenditure incurred on research and development activities where the service involves the application of taxation laws" as a tax agent service. Under section 50-5 of the Tax Agent Services Act 2009 (TASA), a person must not charge a fee for a tax agent service unless registered (TPB — Tax agent services).

The Code obligations that bear most directly on R&D files:

The record-keeping and quality management obligations come from the Tax Agent Services (Code of Professional Conduct) Determination 2024. They apply from 1 July 2025 for tax practitioners with 100 or fewer employees as at 31 July 2024 (and those newly registered between 1 August 2024 and 30 June 2025), and from 1 January 2025 for others (TPB — Code of Professional Conduct).

The TPB's guidance on reasonable care is directly relevant to R&D evidence. The Code does not require an agent to audit a client's books, but the TPB says an agent "should not simply accept what your client provides or tells you at face value", and further enquiries are needed where information does not seem credible (TPB — Reasonable care).

04How do you keep quality consistent across a client book?

Use the same structure for every client. The TPB expects a quality management system covering client engagement, Code compliance, monitoring and proper record keeping. In an R&D practice that usually means one evidence framework, one review checklist and one file standard — applied the same way whether the claim is large or small.

The TPB lists what a quality management system includes: governance and leadership, monitoring performance, compliance with the Code, client engagement, proper recordkeeping, confidentiality, conflicts of interest, and the recruitment, training and management of staff (TPB — Supervision, competency and quality management). The TPB also expects supervisors to provide "a substantial degree of oversight" of work done on their behalf.

In practice, consistency across many R&D clients tends to come from:

• A standard evidence framework. The same fields for every activity — the technical unknown, the experiments, the results, the time and cost link — so reviewers compare like with like.
• A review checklist. The same questions asked of every file before sign-off, matching the ATO's three tests: amount, nature, and the relationship between them.
• A file standard. Advice, the information considered and the reasoning recorded the same way each time, to meet the client-records obligation.

The harder the evidence is to collect, the more pressure there is to accept whatever arrives. A consistent framework makes gaps visible early, while there is still time to ask.

05What does a review-ready R&D file look like?

A review-ready file lets someone who was not in the room follow the claim: dated records showing the technical unknown and the work done, time and cost linked to each registered activity, and the adviser's own reasoning on file. That serves the ATO's three tests and the TPB's client-records obligation at the same time.

The ATO says a company's records must be sufficient to verify the amount of expenditure on R&D activities, the nature of the activities, and the relationship of the expenditure to the activities (ATO — Helping you get R&D claims right). When registering, the company declares it has "maintained appropriate records while conducting your activities" (business.gov.au — Record keeping).

Regulators are also watching advisers. Among its concerning practices, the ATO lists advising companies to make incorrect R&D claims, and notes that such advisers may be referred to the TPB (ATO — Helping you get R&D claims right).

For the client side of the same question, see what contemporaneous documentation means for the RDTI.

06How does structured contemporaneous capture change the workflow?

It moves the first pass from the adviser to the client's team, and from year-end to the year itself. Engineers record hypotheses, experiments, results and time as they work, in a framework the adviser sets. The adviser then reviews and challenges evidence that already exists, rather than collecting it.

The trade-offs are real. Clients have to adopt a new habit, and some will not keep it up without prompting. Onboarding a client to a framework takes adviser time up front. Structured fields can still be filled with thin entries, so review effort does not disappear — it changes from collecting to checking. And the eligibility judgement stays exactly where it was: with the registered adviser.

07What should advisers look for in R&D tax software?

Look for software that structures evidence without making the eligibility call. The adviser should set the framework, approve every output and see a full audit trail. Records should be exportable for the 5-year retention period, and pricing should not be a share of the client's tax benefit.

A short checklist:

1. Adviser in control. The adviser defines the framework and approves anything generated before it reaches a claim.
2. No eligibility automation. The tool can flag gaps; it should not tell a client their activities qualify.
3. Audit trail. Every entry, edit and approval dated and attributed — supporting your own client-records obligation.
4. Export and retention. Open-format export, and records that survive the 5-year retention period whether or not you stay with the tool.
5. Pricing basis. Pricing that is not a percentage of the tax benefit keeps the tool's incentives separate from the claim outcome.

Dossio is built on this model — advisers set the framework and approve AI-drafted items in the native intake flow; clients capture evidence as the work happens. See how Dossio works for advisers, or the partner program for firms bringing a client book. If clients ask how the options compare, in-house vs adviser vs software for R&D documentation sets out the trade-offs, and the R&D Tax Incentive chatbot answers general rule questions without making eligibility calls.

This article is general information, not tax or professional advice.

08Sources

• Tax Practitioners Board — Tax agent services
• Tax Practitioners Board — Code of Professional Conduct
• Tax Practitioners Board — Reasonable care
• Tax Practitioners Board — Obligation to keep proper client records
• Tax Practitioners Board — Supervision, competency and quality management
• Federal Register of Legislation — Tax Agent Services Act 2009; Tax Agent Services (Code of Professional Conduct) Determination 2024
• ATO — Helping you get R&D claims right
• ATO — Keeping records and calculating your notional deductions
• business.gov.au — Record keeping for the R&D Tax Incentive