RDTI Changes 2026: In-Year Payments, Late Filing Flexibility, and What It Means for NZ Businesses
The government has announced the most significant RDTI changes in years — in-year payments to fix the cash flow gap, Commissioner discretion on late filings, and a tightened internal software cap. Here is what you need to know.
The government has just announced a package of changes to the R&D Tax Incentive (RDTI) that represent the most significant update to the scheme in several years. For most NZ businesses doing qualifying R&D, the changes are a net positive. Here is what has changed and what it means for your claim.
In-Year Payments: Fixing the Cash Flow Problem
The headline change is in-year payments.
Until now, the RDTI has operated on a lag. You spend money on R&D throughout the year, apply for General Approval, file your supplementary return, and — if everything is in order — receive a 15% credit when your tax return is processed. That can mean waiting twelve to eighteen months after incurring the spend before you see the money.
For early-stage companies where every dollar matters, that lag is a real constraint. You are effectively pre-funding the government's contribution to your R&D programme.
In-year payments change that. The design has not been fully detailed yet, but the intent is clear: businesses will be able to receive the credit during the year as they incur eligible R&D expenditure rather than at year-end reconciliation. This removes a genuine cash flow barrier and makes the RDTI function more like a continuous incentive than a retrospective rebate.
The practical implications will depend on the implementation details — how frequently payments are made, what documentation triggers each payment, and how reconciliation works at year-end. We will update clients as the rules are confirmed.
Late Filing Discretion: The Hidden Gem
The second change has received less attention but may matter more to a larger number of businesses.
The Commissioner of Inland Revenue is being given discretion to accept and amend late RDTI filings.
Previously, the RDTI supplementary return deadline was hard. Miss it and you lost the credit for that year, full stop. For the RDLTC — the R&D Loss Tax Credit — the deadline has always been particularly punishing: thirty days after your IR4 due date, with no exceptions. We have had conversations with founders who were weeks late and lost meaningful refunds.
The new discretion does not make the deadlines optional. Late filing is still something to avoid, and the Commissioner will not accept every late return. But it creates a pathway for businesses that have a genuine reason for missing a deadline — accountant changes, complex group structures, acquisitions, disputes over eligible spend — to seek relief rather than simply writing off the year.
This is a sensible change. R&D programmes do not always run to the tax calendar, and the previous all-or-nothing approach was disproportionate.
Internal Software Cap: A Tightening That Affects Fewer Than You Think
The government is reducing the cap on non-administrative internal software from $25 million to $3 million.
This sounds significant but is unlikely to affect most of our clients.
The internal software development rules under the RDTI are already some of the most restrictive in the scheme. The $25 million cap was designed to prevent large firms from routing routine IT spend through the RDTI. Dropping it to $3 million tightens that further. For a startup or SME with an R&D spend of $200,000 to $2 million — the typical profile of a GetTaxCredits client — the new cap is not a binding constraint.
If your business is approaching or above $3 million in internal software R&D expenditure, you will want to review your claim structure with a CA. For everyone else, this change is background noise.
The accompanying requirement that eligible internal software R&D generates "wider benefits" is worth watching. The details will matter. Software that is purely for internal productivity is already excluded under the existing rules; the new language appears to reinforce that boundary rather than redefine it.
Mining: Expanded Access
Mining businesses are gaining access to a broader range of R&D expenditure under the RDTI. This is a sector-specific change and outside the scope of most technology, SaaS, medtech, and agritech companies we work with. If you operate in the extractive sector, talk to an adviser with specific mining tax experience.
What This Means in Practice
For businesses currently in the RDTI programme, the most important near-term question is when in-year payment rules come into effect and how to structure claims to take advantage of them. We will be working through this with existing clients as the implementation details are released.
For businesses not yet in the programme, the case for applying has strengthened. The cash flow argument for RDTI has always been limited by the end-of-year lag. If in-year payments reduce that lag significantly, the effective value of the 15% credit improves — you are getting the cash back closer to when you spend it.
For businesses that have missed RDTI filing deadlines in recent years, the late filing discretion is worth raising with your adviser. There may be a pathway to retrospective relief that did not exist before.
Staying on Top of It
These changes add administrative complexity to an already complex scheme. In-year payments will require more frequent documentation and reporting. Late filing discretion requires understanding what constitutes a valid grounds for relief. The software rules require ongoing attention as the details are finalised.
We are building tools to help. Our forthcoming RDTI compliance module — currently in development — is designed to give businesses a live view of their R&D expenditure as it accrues during the year, flag compliance issues before they become filing problems, and generate the documentation needed to support in-year payment claims as the rules come into effect.
If you want early access or want to be updated when it launches, get in touch: team@gettaxcredits.co.nz.