Cash out option for start up R&D

Budget 2014

16 May 2014

From the 2015/16 tax year loss-making start-up companies will be able to cash out all or part of their tax losses from R&D expenditure, while all businesses will be allowed tax deductibility for R&D “black hole” expenditure incurred after 7th November 2013 that is currently neither deductible nor able to be depreciated.  These measures together are estimated to result in net refunds of $58.1 million over four years.

According to the IRD “innovative start-ups” will be able to cash-out up to $500,000 of eligible tax losses in the first year of the initiative (under a company tax rate of 28% this is equivalent to a cash-out of $140,000).  This cap will rise by $300,000 each year up to an eventual maximum of $2 million (a cash-out of $560,000 per year).

If you’d like to know more about how this works in practice, give The Resources Guys a call on (9) 537 4770 or email