--- title: SUPPORTING INNOVATION – R&D | BUDGET SPECIAL ALERT 2018 description: "The Budget allocates $1 billion over four years to finance tax incentives for more research and development (R&D) by Kiwi businesses. R & D has had something of a Stop Go course over the last decade with a range of measures deployed. These have included grants to off-set costs at the front end and tax credits to give some relief at tax time.\n\nThe Government will reintroduce a non-refundable R&D tax credit at 12.5%. It applies to businesses with eligible R&D spend of over $100,000 per annum (up to a maximum of $120 million) and will apply to expenditure incurred from 1 April 2019.\n\nThis is intended to supplement the existing (R&D) loss tax credit which lets innovative companies access their tax losses sooner so they have cash on hand to help grow their business. Eligible companies can cash out R&D loss tax credits for a given tax year. And the tax credit approach is balanced with R&D tax incentives in the form of innovation grants designed by MBIE and Callaghan Innovation.\n\nWhere this leaves the majority of Kiwi businesses is a bit of an unknown. $100,000 is a significant capital threshold for dedication to R&D in a given year. And R&D investments are long-term investments. Businesses need to be able to commit funds or attract investment for programmes that run over a number of years. Incentives for innovation need to be sustainable over time, with a long-term commitment from the Government. The proposals are still being worked over, and it remains to be seen how the rules will apply to software and what benefits can be obtained by businesses in a tax loss position." image: https://balanceca.nz/hubfs/1675608487988.png --- [![Ecom](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/Logo_1.png)](https://balanceca.nz/) - [Home](https://balanceca.nz/) [![Ecom](https://balanceca.nz/hs-fs/hubfs/raw_assets/public/codfina/images/image_web/startup.png?width=60&name=startup.png) Start-ups](https://balanceca.nz/start-ups) [![Established](https://balanceca.nz/hs-fs/hubfs/raw_assets/public/codfina/images/image_web/establishedbusinesses.png?width=60&name=establishedbusinesses.png) Established Businesses](https://balanceca.nz/established-businesses) [![Agricultural](https://balanceca.nz/hs-fs/hubfs/raw_assets/public/codfina/images/image_web/agriculturalbusinesses.png?width=60&name=agriculturalbusinesses.png) Agricultural Businesses](https://balanceca.nz/agricultural-businesses) - [About](https://balanceca.nz/about-us) - [Services](https://balanceca.nz/services) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services_1.png) Annual Accounting & Tax Services](https://balanceca.nz/services#nav_f4) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services_2.png) Business Support Services](https://balanceca.nz/services#nav_f4) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services_3.png) Business Development](https://balanceca.nz/services#nav_f4) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services_4.png) Business Planning](https://balanceca.nz/services#nav_m4) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services_5.png) Cashflow Management](https://balanceca.nz/services#nav_m4) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services_6.png) Accountability Coaching](https://balanceca.nz/services#nav_m4) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services_7.png) Succession Planning](https://balanceca.nz/services#nav_m4) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services_8.png) Organisational Review](https://balanceca.nz/services#nav_b3) [![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services%20icon-9.png) Governance](https://balanceca.nz/services#nav_b3) [![](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/services-10-01.png) Specialist Māori Sector Services](https://balanceca.nz/services#nav_f4) [![](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/11_Connections.png) Connections](https://balanceca.nz/services#nav_b3) # BALANCE Take control of your finances with BalanceCA, your trusted partner for all your accounting and financial needs. 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R & D has had something of a Stop Go course over the last decade with a range of measures deployed. These have included grants to off-set costs at the front end and tax credits to give some relief at tax time.   The Government will reintroduce a non-refundable R&D tax credit at 12.5%. It applies to businesses with eligible R&D spend of over $100,000 per annum (up to a maximum of $120 million) and will apply to expenditure incurred from 1 April 2019.   This is intended to supplement the existing (R&D) loss tax credit which lets innovative companies access their tax losses sooner so they have cash on hand to help grow their business. Eligible companies can cash out R&D loss tax credits for a given tax year. And the tax credit approach is balanced with R&D tax incentives in the form of innovation grants designed by MBIE and Callaghan Innovation.   Where this leaves the majority of Kiwi businesses is a bit of an unknown. $100,000 is a significant capital threshold for dedication to R&D in a given year. And R&D investments are long-term investments. Businesses need to be able to commit funds or attract investment for programmers that run over a number of years. Incentives for innovation need to be sustainable over time, with a long-term commitment from the Government. The proposals are still being worked over, and it remains to be seen how the rules will apply to software and what benefits can be obtained by businesses in a tax loss position. ![image](https://balanceca.nz/hubfs/raw_assets/public/codfina/images/image_web/Logo_1.png) ##### Balance Whanganui - [0800 480 062](tel:+640800480062) [06 348 0062](tel:+64063480062) - [whanganui@balanceca.nz](mailto:whanganui@balanceca.nz) - 10 Dublin Street, Whanganui, 4500 PO Box 670, Whanganui, 4540 ##### Balance New Plymouth - [06 769 5389](tel:+64067695389) - [newplymouth@balanceca.nz](mailto:newplymouth@balanceca.nz) - 141 Powderham Street PO Box 593, New Plymouth Central, New Plymouth 4310 ##### Balance Stratford - [06 765 6156](tel:+64067656156) - [stratford@balanceca.nz](mailto:stratford@balanceca.nz) - 199 Broadway, Stratford, 4352 PO Box 670, Stratford, 4352 Balance Official 2026. All rights reserved. [mailto:hello@balanceca.nz](mailto:hello@balanceca.nz) [tel:+640800480062](tel:+640800480062) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Balance CA", "url" : "https://balanceca.nz/blogs/author/balance-ca" }, "dateModified" : "2024-01-20T18:51:55.749Z", "datePublished" : "2024-01-20T18:51:55.000Z", "headline" : "SUPPORTING INNOVATION – R&D | BUDGET SPECIAL ALERT 2018", "image" : [ "https://balanceca.nz/hubfs/1675608487988.png" ], "mainEntityOfPage" : { "@id" : "https://balanceca.nz/blogs/supporting-innovation-rd-budget-special-alert-2018", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject" } } } ```