New to R&D Tax Credits? Here's What You Need to Know
We're now helping businesses claim R&D tax credits for the first time. Three clients signed up in May alone — here's how first-time claims compare across RDLTC, RDTI, and our New to R&D pathway.
We've been working with R&D tax credit claims for a while now, but something has shifted in recent months: we're increasingly hearing from businesses that have been doing genuine R&D for years — and have never claimed a cent.
Three new clients signed up in May alone under our New to R&D pathway. Several more conversations are ongoing. These aren't businesses without eligible work — they're businesses that simply didn't know the schemes existed, or assumed their accountant had it covered. In most cases, neither was true.
What "New to R&D" Means
Being new to R&D tax credits doesn't mean you're new to R&D. It means you haven't navigated the claim process before. You might not know which scheme fits your situation, whether your activities actually qualify, or how much work is involved in putting together a credible application.
That's what our New to R&D pathway is designed for: getting first-time claimants across the line without making the process feel like a second job.
How the Schemes Compare — Including First-Time Claimants
We use an eligibility checklist internally when scoping new clients. The table below extends that checklist to include considerations specific to businesses claiming for the first time.
| Criterion | RDLTC | RDTI | New to R&D |
|---|---|---|---|
| Entity type | NZ tax-resident company only | Companies, partnerships, trusts, sole traders | Any eligible NZ entity — most first-timers are unlisted companies |
| Tax position | Must be loss-making | Can be profit or loss-making | Varies — we assess both schemes to find the better fit |
| NZ presence | NZ tax resident | NZ fixed establishment | Same requirements apply — offshore work rarely qualifies |
| Location of R&D | Must be in NZ | Core R&D in NZ (limited overseas supporting activity allowed) | Must be primarily NZ-based — common misunderstanding for first-timers |
| IP ownership | Must own IP / know-how | Must own or have exclusive right to use | Often unclear at first — ownership structure must be confirmed early |
| Listed company | Must not be listed | Listed companies allowed | First-time claimants are typically unlisted SMEs or startups |
| Look-through company | Not allowed | Allowed | Common structure among first-timers — affects RDLTC eligibility |
| Group rules | Wage intensity tested on group basis | Grouping affects expenditure caps | Usually a single entity at first-claim stage — rarely a complication |
| R&D definition | Accounting-based R&D (NZ IAS 38 style) | Statutory R&D (tech/science uncertainty) | Biggest hurdle — identifying what actually counts as R&D is step one |
| Novelty test | Not required | Must resolve scientific or technological uncertainty | Often overlooked — we help identify qualifying uncertainty in the work |
| Wage intensity | ≥ 20% R&D labour | No wage intensity test | Must be calculated for RDLTC — many first-timers are close to the threshold |
| Minimum spend | No minimum | $50k (unless ARP used) | Below-$50k spend is common — may only suit RDLTC or require ARP approval |
| R&D identification / scoping | — | — | First and most critical step — which activities, which staff, which years? |
| Prior year claims | Not available | Retrospective General Approval available | RDTI can cover prior years via retrospective GA — often a quick win |
| Record-keeping | Evidence of R&D-related losses required | Technical documentation required by MBIE | First-timers rarely have this — we build it with them from scratch |
| Eligible expenditure cap | Limited by loss position | $120m per year | Not an issue at first-claim scale |
| Credit rate | 28% of R&D-related losses (refundable) | 15% of eligible R&D spend | Depends on scheme — RDLTC pays more per dollar for loss-making companies |
| Refundability | Refundable (subject to cap) | Refundable / offset | Cash back is almost always the primary motivator for first-time claimants |
| Annual refund cap | ~$560k per year | No refund cap (but spend capped) | Rarely binding at first-claim scale |
| Grant-funded costs | Generally excluded | Excluded | Common issue — Callaghan Innovation grants must be excluded from eligible spend |
| Approval required | No pre-approval needed | General Approval from MBIE required | Timing matters — we manage GA applications as part of the onboarding process |
| Repayment risk | Yes — repayment events apply | No repayment events | RDLTC repayment events need to be understood and flagged upfront |
| Common use case | Early-stage, cash-burn startups | Scaling or established R&D businesses | Businesses in any industry discovering they have qualifying R&D for the first time |
The Three Rows That Matter Most for First-Timers
Three rows in that table deserve particular attention:
R&D identification and scoping. The most common reason businesses haven't claimed isn't ineligibility — it's not knowing where to start. We work through the activities, the teams involved, and the technical challenges being addressed to establish what qualifies. This is the foundational step and often takes a full working session.
Prior year claims. Many first-time RDTI claimants don't realise they can apply for General Approval retrospectively. If a business has been doing qualifying R&D for two or three years without claiming, there may be significant unclaimed credits sitting in prior returns. The window isn't unlimited, but it can be substantial.
Record-keeping. MBIE expects technical documentation that explains the R&D activities, the uncertainty being resolved, and the systematic approach used. General practice accountants don't typically prepare this. We build the documentation with clients — using their own descriptions of the work, structured to meet the approval requirements.
What's Driving the Uptake
The pattern we're seeing among May's new clients is consistent: businesses that have been growing steadily, investing in product development or process improvement, and whose accountants have never raised the topic. In some cases, the accountant wasn't aware of both schemes. In others, they knew about the RDTI but not the RDLTC. In a few, the client assumed the R&D credit was only for large corporates or dedicated research facilities.
None of that is true. The schemes are broad, and the bar for qualifying R&D is lower than most people expect.
Getting Started
If your business has never claimed an R&D tax credit and you're not sure where to start, the right first move is a scoping conversation. We'll look at what your business does, whether any of it is likely to qualify, and which scheme — or combination — makes the most sense.
For most first-time claimants, the process is straightforward once the initial scoping is done. The documentation takes time, but the credits are real.
Get in touch to find out whether you have a claim waiting to be made.