The scheme is being reformed. The good news for founders is simple. You have not missed anything, and you have not run out of time.

If you claim the R&D Tax Incentive, or you have been meaning to, there is news worth a few minutes of your attention.

On 12 May 2026, as part of the 2026-27 Federal Budget, the Australian Government announced it will reform the R&D Tax Incentive. The changes draw on the Ambitious Australia report, the independent examination of Australia's research and development system handed down in late 2025. The stated aim is to simplify the scheme and to better target where the support goes.

Here is the part most headlines skip. None of this is law yet, and none of it takes effect for years. So before anyone talks themselves out of this year's claim, let me lay out exactly what was announced, when it starts, and what it changes about the way you run and document your R&D from here.

What the Government actually announced

The reform package contains seven changes. They fall into three clear groups.

Group one. A simpler, sharper offset that rewards core R&D.

1. Supporting R&D activities will no longer be eligible for the offset. The offset will apply to core R&D activities only.

2. To balance that, the offset for expenditure on core R&D activities increases by 6.5%.

3. The R&D intensity premium threshold drops from 2% to 1.5% of expenditure.

Group two. The refundable offset focused on younger firms that need the cashflow.

4. Access to the refundable offset will be limited to a company's first 10 years of operation.

5. The minimum R&D spend to be eligible in a given year rises from $20,000 to $50,000.

6. The turnover threshold for the refundable offset rises from $20 million to $50 million.

Group three. More room for large-scale R&D done here in Australia.

7. The maximum R&D expenditure threshold rises from $150 million to $200 million.

The timing that matters

Every one of these changes starts on 1 July 2028, and applies to all R&D entities.

Until then, the scheme runs under the current rules. That means your claims for this income year and the next one are assessed exactly as they are today. You have two full income years of runway before anything shifts. The smart move is to use that runway, not wait it out.

What this really means for you

Strip away the detail and one message sits underneath all seven changes. The scheme is being tightened and pointed more deliberately at genuine, well-documented research. That direction of travel was always coming. The Budget just put a date on it.

The line between core and supporting becomes everything

Right now, supporting activities can carry real value in a claim. From July 2028 they drop out, and the offset lives or dies on how clearly you can define and evidence your core R&D. The higher core offset rewards businesses that get this right. It quietly penalises those who have leaned on loose framing.

This is not a 2028 problem. The habits that make a claim defensible take time to build. Founders who start framing and documenting their core activities properly this year will walk into the new rules already fit for them.

Record-keeping moves from good practice to non-negotiable

The R&D Tax Incentive is a self-assessment program. You claim, and the regulator can review afterwards. As the rules tighten and the offset concentrates on core activity, the quality of your records is what stands between you and a clawback.

An audit-ready claim is built on a few simple disciplines, kept up as you go rather than reconstructed in a panic later.

Contemporaneous records. Notes, data and decisions captured at the time the work happens, not written up months afterwards.

A clear nexus. A visible line connecting every dollar you claim to a specific registered R&D activity.

Technical evidence for core activities. The hypothesis you set out to test, the experiments you ran, the outcome that was genuinely unknown at the start, and the new knowledge you generated.

The supporting paper trail. Time records for staff on R&D, contracts and invoices for R&D inputs, and the project decisions that show why the work was done.

Get those four right and an audit becomes a formality rather than a fire.

The short version

The R&D Tax Incentive is being reformed, announced in the 2026-27 Budget. It is not law yet.

Seven changes are coming. Supporting activities go, the core offset rises by 6.5%, and the refundable offset narrows to younger firms under $50 million turnover.

Everything starts on 1 July 2028. This year and next year run under the current rules.

Core activity framing and record-keeping are about to become the difference between a clean claim and a clawback.

The businesses that prepare now walk into the new scheme already ready for it.

Let us get this year's claim underway, and make it audit-proof

This year's R&D registrations can be lodged from 1 July. Now is the build-time. Getting your activities framed and your records in order before the financial year closes is the single best thing you can do for your claim, and for every claim that follows under the new rules.

Our R&DTI registration success rate sits at 100%. We would like yours to be part of that, and we would like it to be a claim that holds up to any review the future throws at it.

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The Audit-Ready R&D Package

A focused piece of work that gets your R&D record-keeping, your core activity framing, and your evidence trail into a shape that stands up to scrutiny.

$497 normally $1,497

To claim the $497 price, book your R&D strategy call and pay your deposit before 30 June. That secures your place in our R&D calendar for this year's submissions, which can be lodged from 1 July.

Ready to get this year's R&D claim moving and lock in the audit-ready price?

Book your R&D strategy call.