The Business Advisory Blog

The Business Advisory Blog

Insight, news and updates from Alliott NZ Chartered Accountants, Auckland New Zealand. The views expressed here are the views of the author and should be discussed in further detail should an article be relevant to your individual circumstances.

While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.

Vanessa Williams
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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

Topics: Inland Revenue Department research and development R&D tax credit technology