The R&D Tax Incentive Guide is a very useful tool to help you understand the incentive and its rules. We advise that your company (Management, Financial staff, and R&D managers), familiarise yourselves with the content of this guide. First, you need to establish if your R&D activity is eligible:
- You can do this by using the IRD’s Research & Development Tax Incentive eligibility tool.
Then you need to register – it’s a bit different this year:
- In the 2020/21 income year, if you expect to have less than $2 million of eligible expenditure, you must obtain general approval for your R&D activities. General approval provides certainty that your R&D activities are eligible before you file your tax return.
- The general approval application will require you to set out the R&D activities you are seeking approval for. If the eligible R&D is expected to take longer than a year, you can apply for approval for up to 3 years.
- The application for general approval can be made at any time during the year and must be filed by the 7th day of the 2nd month following the end of your income year. Therefore businesses with a standard 31 March balance date must file the application for general approval by 7 May.
- You can now enrol for the R&D tax incentive with Inland Revenue through your myIR account. Choose the I want to tab and RDTI enrolment. You’ll need to answer a few questions to determine eligibility. Once approved, you’ll have access to the R&D Tax Incentive workspace where you’ll be able to complete the required forms from 1 April 2020. (Source: Callaghan Innovation – R&D funding)