As we barrel toward the end of another tax year, businesses need to be aware of the looming deadlines for claiming under New Zealand’s research and development (R&D) funding programmes.
“Every year we hear from business owners and executives who are too late,” says Tom Moore, director at the business advisory firm BlueRock. “They miss out, and there is nothing more they can do to claw it back.”
Moore says there are two entitlement-based R&D funding programmes available to businesses in New Zealand. Business can claim tax credits or refunds up to 15% of their yearly R&D expenditure through The Research and Development Tax Incentive (RDTI), and a further 28% through the R&D Loss Tax Credit, if they are making an annual loss because of R&D investment. As these are entitlements, they are not competitive, and all eligible businesses can claim them.
“The R&D incentives can really add up,” says Moore. “R&D is inherently costly, but it benefits the nation through innovation, business growth and job creation. For this reason, Government incentivises R&D with cash payments.”
Both programmes have yearly deadlines coming up, and once they pass, the business cannot claim its funding for that tax year.
For a standard business on a March 31 tax year end, the 2023-24 claims are usually due by April 30, 2025, and general approvals for R&D activity due on May 7.
Moore says businesses should act now: “Consider your R&D activity from the past year or so – think new products and improving processes. Note down the projects and estimate a cost for each (staff, materials, contractors, etc.). If you think you have spent more than $50,000 on R&D, then you are going to miss out if you do not apply before the deadlines.”
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