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.
Businesses 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.