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Research and development tax incentive

Written by Vanessa Williams on October 14th, 2019.      0 comments

Enrolling for the Research and development tax incentive (RDTI)

The Research and development tax incentive, available from the 2019/20 income year, features a 15% tax credit on up to $120 million of eligible expenditure.

set goals-464Businesses can use the eligibility tool and guidance on the Inland Revenue website to find out if their R&D activities meet the incentive criteria.

You must spend more than $50,000 on eligible R&D in a tax year to claim this credit, unless you use an approved research provider. This exception helps make the R&D tax credit accessible to businesses of all sizes.

Businesses that plan to claim this tax credit need to enrol through myIR before they can submit a supplementary return at the end of their tax year.

To enrol, go to myIR and choose the ‘I want to’ tab and ‘RDTI enrolment’. This process should take around 10-20 minutes to complete.

Once enrolled, you'll have access to the R&D tax incentive workspace where you'll be able to begin entering information from November 2019.

The R&D tax credit operates on a self-assessment basis. This means you are responsible for determining whether your R&D activities and expenditure meet the eligibility requirements of the legislation, and for maintaining records to support your eligibility. Your records must be sufficient to verify: 

  • the nature of the R&D activities and the scientific or technological uncertainty or uncertainties they were designed to resolve
  • the amount of expenditure incurred on R&D activities
  • the relationship between the expenditure and the R&D activities.

Relevant records include those that are normally kept by businesses to support income tax and GST claims. Additional records will be required to cover the planning and conduct of R&D activities, and to isolate eligible expenditure. These additional records will vary depending on the nature of the business and the R&D activities.

Find out more about R&D eligibility and enrolment here or call the team at Alliott NZ Chartered Accountants in Auckland on 09 520 9200.

Source: IRD

 

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