But a $185,000 debt to the Australian Taxation Office has put the brakes on Rosco McGlashan's dream of smashing the coveted land-speed mark in his car, the Aussie Invader.

Mr McGlashan, who already holds the Australian land speed record with a blistering 802km/h, or 500 miles per hour, is described as an "innocent victim" of the ATO's crackdown on tax rorting in the lucrative research and development sector.

A botched application by an outside consultant for R&D money in 2014 provided a much-needed cash injection for the Aussie Invader, but when ATO investigators took a closer look they found the money should not have been paid and demanded it back.

Mr McGlashan has reached a settlement with the consultant who got him into trouble with the Tax Office, but the ATO debt has seen his company, Aussie Invader Pty Ltd, plunged into insolvency and now the liquidators want to sell Aussie Invader - seven years in the building - and Mr McGlashan is worried it might go for scrap.

The Perth-based speed pioneer says his dream of an Australian-built vehicle breaking the 1000 miles per hour barrier looks further away than ever, with the car's creator not allowed even to work on the car under the terms of his firm's liquidation.

After sinking all his money, and his superannuation, into Aussie Invader and the dispute with the Tax Office, Mr McGlashan is still trying to raise funds to keep the dream alive,

But it is tough, especially when the main rival for the 1000 miles per hour crown is a British team believed to have raised tens of millions of pounds through sponsorship.

"We're racing to beat the Brits and we've lost 14 months fighting the ATO, so we've possibly lost a world record," Mr McGlashan told Fairfax.

"I'm the world's greatest optimist but after spending my life on this project, I'm starting to wane.

"We're dead in the water at the moment."

Perth lawyer and Research and Development taxation specialist Tania Waterhouse says Mr McGlashan was the naive victim of "advisors" looking to cash in on the boom in R&D incentives.

"Rosco is the innocent victim of a firm who held themselves out as R&D advisers yet did not understand the first principles of taxation law," Ms Waterhouse said.

"Rosco relied on their advice to his extreme detriment."

The ATO declined to comment on the Aussie Invader case, citing "confidentiality"

But the Tax Office said it had had problems with firms holding themselves out as R&D advisors.

"Whilst most R&D advisors do the right thing, there are individual R&D advisors and some R&D advisory firms who exhibit aggressive behaviours, and/or who have been reckless with their advice," a Tax Office spokeswoman said,

"Whilst the partner agencies do risk assess individual high risk R&D claims on their merits, the ATO has a number of 'promoter' and general compliance cases that are focussing on specific adviser groups and their clients.

But the spokeswoman insisted that the Tax Office tried to help firms who fell victim to shonky R&D operators.

"Clients who have been given bad R&D advice by higher risk advisers themselves understand how the program works, and are brought back into the system with minimal financial consequences," she said.