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 Grant |
|---|---|---|---|
| Entity type | NZ tax-resident company only | Companies, partnerships, trusts, sole traders | NZ incorporated company, limited partnership, or Māori entity — sole traders and ordinary partnerships excluded |
| Tax position | Must be loss-making | Can be profit or loss-making | Not a criterion — grant available regardless of tax position |
| NZ presence | NZ tax resident | NZ fixed establishment | Must be incorporated in NZ — NZ tax residency alone is not sufficient |
| Location of R&D | Must be in NZ | Core R&D in NZ (limited overseas supporting activity allowed) | R&D must be conducted in NZ; overseas labour assessed case by case by Innovation Services |
| IP ownership | Must own IP / know-how | Must own or have exclusive right to use | Not a stated criterion for this grant |
| Listed company | Must not be listed | Listed companies allowed | No specific restriction; government-owned entities (50%+ govt ownership) excluded |
| Look-through company | Not allowed | Allowed | Not specifically addressed in grant criteria |
| Group rules | Wage intensity tested on group basis | Grouping affects expenditure caps | Key disqualifier — cannot be part of a group with existing R&D capabilities; grouped by common ownership (50%+), common directors, or policy |
| R&D definition | Accounting-based R&D (NZ IAS 38 style) | Statutory R&D (tech/science uncertainty) | Scientific or technological uncertainty; must create new knowledge or improved processes, services, or goods; planned and documented |
| Novelty test | Not required | Must resolve scientific or technological uncertainty | Required — must resolve uncertainty not solvable from publicly available information |
| Wage intensity | ≥ 20% R&D labour | No wage intensity test | No requirement |
| Minimum spend | No minimum | $50k (unless ARP used) | No minimum; maximum project cost $1m (maximum grant $400k at 40%) |
| R&D identification / scoping | — | — | Detailed project plan and budget required in application before approval |
| Prior year claims | Not available | Retrospective General Approval available | Forward-looking only — applies to first structured R&D project; no retrospective element |
| Record-keeping | Evidence of R&D-related losses required | Technical documentation required by MBIE | Quarterly claims and progress reports via Innovation Services portal required throughout |
| Eligible expenditure cap | Limited by loss position | $120m per year | Max $400,000 grant (40% of project costs up to $1m) over up to 2 years |
| Credit rate | 28% of R&D-related losses (refundable) | 15% of eligible R&D spend | 40% co-funding — not a tax credit; MBIE reimburses 40% of eligible costs quarterly |
| Refundability | Refundable (subject to cap) | Refundable / offset | Quarterly reimbursement after costs incurred — not a tax refund |
| Annual refund cap | ~$560k per year | Refund capped at PAYE paid in the year; excess carries forward | $400,000 total cap over grant period (up to 2 years) — not an annual figure |
| Grant-funded costs | Generally excluded | Excluded | Costs funded by this grant cannot also be claimed under RDTI or RDLTC — no double-dipping |
| Approval required | No pre-approval needed | General Approval from MBIE required | Full application to Innovation Services required before starting; funding agreement with MBIE signed if approved |
| Repayment risk | Yes — repayment events apply | No repayment events | No stated repayment obligation — costs reimbursed after being incurred; funding agreement conditions apply |
| Common use case | Early-stage, cash-burn startups | Scaling or established R&D businesses | First structured, in-house R&D project — designed as stepping stone to RDTI; capability-building programme, not a one-off project |
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 that if we get your General Approval across the line before 30 June, the prior financial year can be included in your first claim. For a business that has been doing qualifying R&D for a year or two without knowing it, that's potentially two years of credits recovered at once — not just the year you sign up.
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.