HOW DOES THE RDTI WORK?

LET'S GET INNOVATIVE! There's lots of other support available

If your business wants to take innovation to the next level, check out the range of support offered by Callaghan Innovation.

You may be able to benefit from other types of R&D funding, or support such as:

  • access to experts
  • technology and product development
  • innovation skills, and more.

To find out more, visit the Callaghan Innovation website.

Help to conduct your R&D

You can contract someone else to do R&D on your behalf and still claim the RDTI.

However, if you spend less than $50k, the expenditure will only qualify for the RDTI if you use an approved research provider.

Here's a list of approved research providers, which includes Callaghan Innovation's Research and Development Solutions.

Transition Support Payment for ex-Growth Grant recipients

If you’ve previously received a Growth Grant from Callaghan Innovation, you may be eligible to receive a Transition Support Payment.

Callaghan Innovation has worked to identify and contact potentially eligible customers, so it’s likely you have already received communications about this.

The Transition Support Payment is a temporary form of assistance to help you maintain your investment in R&D while you move to the RDTI. It can bring the total R&D support you receive to a similar level as your Growth Grant, provided you maintain a similar level of R&D.

Transition Support Payments can be paid for the following income years:

  • 2019/2020
  • 2020/2021
  • 2021/2022.

Before you can apply for the Transition Support Payment for a particular income year, you must have applied for the RDTI for that year.

Note that you may be eligible for a Transition Support Payment even if your RDTI application is unsuccessful. However, you must make a ‘good faith attempt’ to participate in the RDTI. Find out more about this below.

  • The RDTI is now the Government’s main way of supporting business investment in R&D, following the end of the Growth Grant on 31 March 2021.

    Because of differences between the two schemes, some activities that qualified as R&D under the Growth Grant may not be eligible R&D under the RDTI.

    Recognising this, the Government introduced the Transition Support Payment to help former Growth Grant recipients maintain their investment in R&D, while becoming familiar with the RDTI eligibility requirements and process for applying.

    View the Ministerial Direction re administration of the Transition Support Payment.

  • To be eligible for the Transition Support Payment, your business must have:

    1. Either had an active Growth Grant contract on the last day of your 2018/19 year and participated in the RDTI in the 2019/20 year, OR had an active Growth Grant contract during the period from 1 April 2019 to 31 March 2021 inclusive AND 
    2. Participated in the RDTI in the relevant year AND
    3. Not have received a Project Grant in the relevant income year (this exclusion doesn’t apply to Collaborative Project Grants* - see below).

    Usually, the company that held the Growth Grant is the same entity that participates in the RDTI.  However, there are some instances where the RDTI applicant may be different from the Growth Grant holder.  

    Callaghan Innovation and Inland Revenue need to be aware of the relationship between the Growth Grant holder and the RDTI applicant.

    If any of the following scenarios applies to your business, we suggest you contact us at RDTIHelp@callaghaninnovation.govt.nz to discuss the impacts on the Transition Support Payment in more detail:

    • you’re part of a corporate group with multiple companies - in this scenario, only those companies that apply for the RDTI are eligible for the Transition Support Payment
    • you’re a Limited Partnership - in this scenario, the Limited Partnership can apply for the Transition Support Payment but not the RDTI, so individual partners will need to apply for the RDTI
    • you held a Growth Grant but a subsidiary or parent company applies for the RDTI - in this scenario, the former Growth Grant holder can apply for the Transition Support Payment.

    * Collaborative Project Grant recipients: Businesses that were party to a Collaborative Project Grant can apply for the Transition Support Payment. However, Collaborative Project Grant expenditure must be excluded when determining eligible expenditure under the Transition Support Payment.

  • The Transition Support Payment amount is determined by formulas that take into account eligible R&D expenditure under both the Growth Grant and RDTI schemes.

    A different formula will be used depending on whether you are eligible for a full-year or part-year payment. 

    Part-year payments only apply for the 2020/2021 income year for businesses with a balance date (end of income year) between 1 April 2021 and 30 September 2021. 

    These businesses were able to receive Growth Grant payments until 31 March 2021 (the end of the Growth Grant scheme) and apply for the RDTI for the remainder of their 2020/2021 income year.

    Find out more about how payments are calculated.

  • A Transition Support Payment is paid on the basis that you have made a good faith attempt to participate in the RDTI.

    ‘Good faith RDTI attempt’ means you have included on your RDTI application all R&D activities that you reasonably consider to be eligible for the RDTI. 

    Any eligible activities omitted from your RDTI application, therefore, cannot be included in your Growth Grant R&D expenditure calculation.

  • Businesses applying for the Transition Support Payment are required to keep separate records and account for R&D expenditure under the rules of both the Growth Grant and RDTI schemes.

    Because you self-assess your Growth Grant Eligible R&D Expenditure, you must be able to provide evidence to support this self-assessment if required.

    Up to a third of all Transition Support Payment applications (for each of the three relevant years) will be audited to ensure the integrity of the scheme.

    Any overpaid Transition Support Payments will need to be repaid, along with an additional amount set by Callaghan Innovation. Callaghan Innovation may waive this additional amount if the excess amount you received was small (compared to your actual Growth Grant Eligible R&D Expenditure) and the error was made in good faith, or if other exceptional circumstances apply. 

    Find out more about what documents you should keep as evidence to support your application.

  • Applications for the Transition Support Payment can be made via Callaghan Innovation’s online IMS portal. 

    This will automatically identify which income year/s you are eligible for, and give you access to the relevant application forms, as they become available.

    Before applying, you must have received your ‘R&D Tax Incentive: Transition Support Payment’ letter from Inland Revenue. This will be sent to you after your Supplementary Return has been finalised (if your RDTI application was successful) or after you receive your RDTI application decision (if your application was declined).

    It’s not possible to apply for the Transition Support Payment before your Supplementary Return is finalised. This is because the Supplementary Return is needed to determine the ‘RDTI Eligible R&D Expenditure’ amount, which is used to calculate the Transition Support Payment.

    Find out more about what information you need to provide when you apply.

  • Application deadlines are:

    • 31 August 2022 for the 2019/20 income year
    • 31 October 2022* for the 2020/21 income year
    • 24 April 2024* for the 2021/22 income year.

    * These dates may be extended depending on processing times.