R&D new guidance and deadlines - you might be back in the running for a 15% credit

Tax Alert - May 2021

By Simon Taylor, Brendan Ng and Denver Ingram

If you previously thought that the scope of the Research and Development Tax Incentive (RDTI) was very narrow, now is a great time to reconsider how it could benefit your business under Inland Revenue’s updated guidance and extended deadlines.

New R&D guidance material released by Inland Revenue brings a welcome broadening of the interpretation of the rules, and filing extensions are available, including if your R&D activity (or preparation of your claim) has been materially delayed or disrupted by COVID-19. The broadening of the interpretation brings the regime more into line with the overall policy intent of incentivising R&D activity.

New guidance material issued – what does this change?

Following a consultation process, Inland Revenue has released two new RDTI resources:

These and other documents can be found on the Inland Revenue RDTI page.

There has been some media coverage expressing disappointment in the application of the RDTI to date, especially for software companies. Previously many applications were being declined based on a very strict interpretation of the R&D Tax Incentive Guidance. While the underlying legislation remains the same, the new guidance confirms how the legislation should be applied in practice, and the team assessing RDTI claims has been trained on the new guidance and follow it closely. The eligibility summary was finalised after the detailed guidance, so the comments in the eligibility summary should prevail.

Further specific guidance on the software sector is also being prepared.

Where wording has changed or a new example introduced this can be seen as a correction or clarification to the previous interpretations that may have been applied too narrowly.

Some of these changes include:







New knowledge, and/or
new or improved goods, processes or services


“Newness” test on a
worldwide basis.


Intent to create
something that was “better” than the original should meet the test.


Scientific or technological
uncertainty: what is science and technology


Did not specify what
the realm of science and technology covered.


Defines science and
technology to include specifically software development, product development,
manufacturing process improvement and medical and food industry science.


Scientific or
technological uncertainty: deducible by a competent professional


Asks whether a
competent professional knows that an existing methodology will achieve the


Asks whether, in
fact, the competent professional can resolve the uncertainty without
undertaking a systematic course of investigation – the test is not one of the
degree of confidence which the competent professional has.


Scientific or
technological uncertainty: nature


Applies when a
competent professional does not know whether something is achievable.


Includes a problem of
a scientific or technological nature.


Use of known


No uncertainty if a
competent professional knows an existing methodology will achieve the goal.


Allows the use of
known processes where the result or outcome is unknown.


System uncertainty


Not addressed.


Scientific or
technological uncertainty includes the situation where the components of a
system and their interactions are known, but the outcome of the system cannot
be deduced from the outset. This is a
key development for software.


Systematic approach


Required a planned
and structured approach.


Still requires a
planned and structured approach but allows for flexibility and adaptation as
the process plays out, as long as it remains logical and focused on solving the


As a new incentive, it was always intended for the application of the RDTI’s rules to be reviewed and consulted on to ensure they were achieving the desired outcome of increasing the amount of R&D done in New Zealand. It is great to see this in action here.

What should I do now?

If you had considered the regime based on the historical guidance and thought it did not apply, then it is worth re-assessing the level of benefit available under the revised interpretation.

If you see something in the new resources that materially affects what you have already submitted (or did not submit) to Inland Revenue, please get in touch with our R&D team or your usual Deloitte advisor.

COVID-19 extensions

Two RDTI deadline extensions are now in effect:

  • In April 2021 the due date for 2020 supplementary returns (being the all-in-one application for a 2020 income year R&D tax credit) was extended from 30 April 2021 to 29 June 2021, and the deadline for 2021 criteria and methodology approvals (part of the significant performer regime) was extended – see table for relevant dates.
  • In September 2020 the due date for general approval (being the application for pre-approval of an activity for a 2021 income year R&D tax credit) was extended – see table for relevant dates.

In both cases the deadline variation only applies where “the planning or conduct of eligible research and development or the ability to appropriately obtain necessary information, seek advice and formulate an application… on time has been materially delayed or disrupted by the COVID-19 outbreak and its effects.”

RDTI obligation


Original due date


COVID-19 extension


2020 supplementary return (all balance dates with extension of time)


30 April 2021


29 June 2021


2021 general approval application (March balance date)


7 May 2021


7 August 2021


2021 general approval application (other balance dates)


7th day of the second month after balance date


7th day of the fifth month after balance date


2021 criteria and methodologies approval (March or late balance dates)


7th day of the second month after balance date


7th day of the fifth month after balance date


2021 criteria and methodologies approval (early balance dates)


7th day of the second month after balance date


7 August 2021


How do I access the extension?

Register for the RDTI, then file your return or application by the extended due date – no official opt in is required. Ensure that you have records available supporting your eligibility for the extension. As we all know, COVID-19 had wide-ranging impacts. The need for the extension may come from various areas of your business, from the actual R&D work to the recording. Documentation explaining why time was spent elsewhere (e.g. finance team members were required on wage subsidy matters and delayed in reviewing eligible R&D expenditure) would be useful.

There are some quirks to the application of these extensions, please get in touch with your usual Deloitte advisor if you are unsure on how they apply to your business.

Further extension

Note that following the initial publication of this article, a further extension of due dates has been announced to 31 August 2021 for:

  • year one (2019-20 income year) supplementary returns; and
  • year two (2020-21 income year) general approvals and criteria and methodologies (CAM) approvals.

Callaghan Growth Grant top up, and refundability

In addition to the above, former Growth Grant claimants have been notified of an additional transitional support in the form of a one-off adjustment to the RDTI claim entitlement for the 2022 income year (and potentially earlier years). In order to be eligible for the support, businesses will need to enrol and complete an RDTI application. Further details on the transitional support and how to access it will be released in the coming months, please get in touch if this is of interest to your organisation.

The Government is also investigating how businesses in a non-taxpaying position may be able to access RDTI refunds in-year. This would be a welcome change to assist with cash flow.

Keep in mind some of the key points for preparing your RDTI claim covered in our previous Tax Alert article here.

For more information, contact our specialist R&D team or your usual Deloitte advisor.

Did you find this useful?