Cawthron CEO, Gillian Wratt, welcomes the new government research and development tax credits scheme.

The new research and development tax credits scheme is a welcome and overdue recognition by government of the benefits to the economy of private sector research and development.

The government’s new 15% R&D tax credit will mean most businesses have another option for obtaining government support for their research and development projects. As long as you meet the criteria (which can include non tax paying organisations) it’s a guaranteed 15% credit, there’s no lengthy and competitive application process, just a normal tax return. But it does come with some fish hooks. The organisation and activity must meet eligibility criteria, including bearing the risk of the project. A fixed-price, outsourced project to achieve a defined outcome may fail the criteria if there’s no risk involved to the client. Companies spending less than $20,000 will have to use an approved research provider. And yes, Cawthron is one of those.
 
Cawthron will ensure that we structure projects in such a way that they will fully support a tax credit application if required. Whether to apply for R&D tax credits or other forms of government R&D support (they generally can’t be used together) remains the customer’s choice. Tax credits will not replace support schemes such as TBGs, but they could allow companies to extend the scope of projects funded by internal resources and get something back for taking a development risk, and that has to be good for New Zealand.