What's involved in the claims process?
To claim your R&D tax credit, you need to provide Inland Revenue with details of your actual spending on eligible R&D activities.
You do this by completing a ‘Supplementary Return’ after the end of your income year, and submitting it via myIR.
You must be able to verify all activities and expenditure claimed for. This means record-keeping is an important part of the claims process.
The RDTI is part of the tax system, which requires you to keep adequate records to verify your tax position.
For the RDTI, this means keeping records that verify your eligibility for any tax credit you claim.
Find out more about record keeping.
Spending in a real life, commercial setting will often contribute to both eligible and non-eligible activities at the same time.
For example, you may have salaried staff who carry out your eligible R&D as well as performing other tasks too.
Any expenditure that contributes to both eligible and ineligible activities must be apportioned so that when you complete your Supplementary Return, you only claim for the RDTI eligible portion.
Find out more about apportioning expenditure.
Inland Revenue requires records that support an RDTI claim to be contemporaneous.
This means they should be made at the same time as the eligible activities they document, and not created retrospectively, e.g. at the end of the tax year or at the end of the project.
When you apply for the RDTI, you are asked to provide an estimate of your anticipated R&D expenditure.
If your actual expenditure differs significantly from your estimate, you may be asked to provide information that supports the increased spend. This is to confirm that all expenditure claimed is linked to eligible R&D activities.
If you have an approved RDTI application, an RDTI Supplementary Return will automatically be generated by Inland Revenue, and will appear in the special RDTI section in myIR.
Find out more about the Supplementary Return.
Supplementary Return deadline
The deadline for submitting a Supplementary Return is within 30 days after the due date of your income tax return.