R&D tax incentive picture of light bulb full of ideasIn May the government introduced a new R&D tax incentive to encourage businesses to spend more on research and development. Because it applies to the 2019/2020 tax year, any R&D expenditure incurred from 1st April 2019 could qualify for the tax incentive if it meets the eligibility criteria.

We recommend that businesses document and keep records of all activity related to R&D expenditure incurred from 1st April 2019 so they are ready for filing at the end of this tax year.

The R&D tax incentive includes:

  • 15% credit rate
  • $120 million cap on eligible R&D expenditure
  • $50,000 per year minimum R&D spend threshold (expenditure with an approved research provider is not subject to the minimum spend threshold)
  • Expanded definition of “R&D” to ensure the credit can be accessed more easily across all industries

Full details of the eligibility criteria and conditions that need to be met for the R&D tax incentive are specified in the Taxation (Research and Development Tax Credits) Act 2019.

The incentive is just one of the strategies supporting the government’s goal to raise research and development spend in New Zealand to 2% of GDP over 10 years, which also includes the Callaghan Innovation Grants.

Bhavin Sanghavi Audit DirectorIf your business is interested in applying for a Callaghan Innovation Grant we can help you with the grant process and maximise its chance of being approved. Please contact Director Bhavin Sanghavi to find out more on DDI (09) 839-0248 or email bhavins@uhyhn.co.nz.