R&D Tax Credits: Can You Do It Yourself?
An honest comparison of DIY versus working with a consultant for New Zealand R&D tax credits — what is actually free, what it costs in time, and what gets missed. Including a real case where an accountant told a client they couldn't access the RDLTC. They could.
Yes. You can do it yourself.
Every R&D programme available to New Zealand businesses - the RDTI, the RDLTC, the New to R&D Grant - is free to apply for. MBIE does not charge. Inland Revenue does not charge. There is no gatekeeping that requires you to have a consultant involved.
This post is about what DIY actually looks like: the time it takes, where the complexity sits, and what tends to get missed when businesses navigate these schemes without specialist help. Including a case where a client's accounting firm told them they could not access the RDLTC. They could.
What Is Free
The application processes are publicly available and self-service:
RDTI General Approval is filed directly with MBIE through their online portal. There is no fee. You describe your R&D activities, identify your eligible expenditure, and submit. MBIE reviews and issues approval. If you have questions, MBIE Innovation Services staff will correspond with you directly.
RDTI Supplementary Return is filed with Inland Revenue as part of your income tax return. No fee. You calculate eligible expenditure, apply the 15% rate, and claim the credit or refund.
RDLTC Supplementary Return is filed with Inland Revenue alongside your income tax return. No fee. You calculate R&D labour costs, verify wage intensity, and claim the cash-out.
New to R&D Grant is assessed by MBIE Innovation Services. No fee. You apply online and describe your proposed R&D project, budget, and capability development plan.
The information you need to navigate all of this is publicly available. IRD and MBIE publish detailed guidance documents. The Regional Business Partner Network offers free advisory sessions. There is no information that is only available through a paid consultant.
What DIY Takes
Free to apply does not mean free to do. The cost is your time - and for founders and CFOs, that time has a real value.
Here is a realistic estimate for a business going through the RDTI for the first time, doing the work themselves:
Understanding eligibility: 3-6 hours. Reading the legislation and guidance, working out whether your activities qualify, understanding the distinction between core and support activities.
Preparing the General Approval application: 20-40 hours. Writing technical narratives for each R&D activity, mapping activities to MBIE's eligibility criteria, documenting technical uncertainty, identifying personnel and expenditure. First-time applicants typically spend at the higher end.
Preparing the Supplementary Return: 4-10 hours. Calculating eligible expenditure, apportioning labour costs by time allocation, calculating contractor spend, applying the credit.
Responding to queries: MBIE and IRD may come back with questions. This is unpredictable - it might be an hour, it might be a day.
Total for a first-year RDTI claim, self-managed: 30-60 hours of senior time. For subsequent years, closer to 15-25 hours once you know what you are doing.
The RDLTC is similar in administrative effort, with the added complexity of the wage intensity test.
Where It Gets Complicated
The schemes are straightforward to understand at a surface level. They get complicated when you move from understanding the rules to applying them to your specific situation.
Activity definition. The RDTI requires a precise description of R&D activities that resolves scientific or technological uncertainty. What counts as a core activity versus a support activity matters - it affects what expenditure you can include. Getting this wrong does not necessarily result in a declined application, but it can result in a smaller claim than you are entitled to.
Labour apportionment. Eligible labour costs must be apportioned based on actual time spent on R&D. If a developer spends 60% of their time on eligible R&D and 40% on product maintenance, only the 60% can be claimed. This requires records. IRD expects contemporaneous records, not year-end estimates.
Wage intensity. The RDLTC has a threshold: R&D labour costs must represent at least 20% of your total labour costs. If you are close to that line, the way you calculate it matters. Misunderstanding the numerator or denominator can result in failing the test unnecessarily - or, in the other direction, passing it incorrectly and creating audit risk.
Accounting treatment. How costs are recorded in your accounts affects what is eligible. Capitalised software development costs are not eligible expenditure under either scheme - they are balance sheet assets, not expenses. Businesses that capitalise R&D spend, often on reasonable accounting grounds, can inadvertently exclude large portions of their eligible costs.
Scheme interaction. The RDTI and RDLTC can be claimed together. Businesses that are only aware of one scheme often miss the other entirely.
What Gets Missed
The most common things we see when businesses come to us after trying to navigate these schemes themselves:
Claiming only a portion of eligible activities because the others did not obviously look like "R&D" - testing whether an integration works, prototyping an approach that ultimately failed, investigating whether a third-party tool could handle a dataset at scale. All of this can qualify.
Not claiming contractor costs because it was not obvious they were included.
Missing the RDLTC entirely because the accountant was focused on the RDTI.
Underestimating labour costs because time records were not maintained and conservative estimates were used at year-end.
Claiming as a loss-making company without checking whether the RDLTC would produce a better outcome than carrying the loss forward.
What Experience Actually Adds
One of the less obvious benefits of working with someone who has filed many of these claims is pattern recognition - specifically, knowing what IRD accepts and what it does not, from direct experience rather than from reading the legislation.
Some exclusions are clear on paper but easy to over-claim in practice. Travel costs, entertainment, marketing, and sales expenditure are not eligible under either the RDTI or RDLTC. The line sounds obvious until you are looking at a real set of accounts: a conference trip that was partly about showcasing a prototype, a client dinner where the technical discussion was substantive, a marketing budget that included user research feeding directly into product development. Experienced practitioners have seen IRD's response to these situations before. They know which arguments hold and which ones create audit risk.
The more significant value comes with structural complexity. Three scenarios come up regularly:
Capital raises. How a capital raise is structured can affect what happens to your eligible expenditure - particularly where grants, convertible notes, or government co-funding are in the mix. Grant-funded costs cannot be double-claimed under the RDTI. The interaction between funding sources and eligible expenditure is a live issue on many claims, and getting it wrong in either direction creates problems.
Trusts. Where a trust holds shares in the R&D company - common in founder-owned NZ businesses - the ownership and control tests relevant to certain scheme thresholds can behave unexpectedly. The RDLTC's associated persons rules in particular require careful application when trust structures are involved.
Shifting ownership or restructuring between entities. If an R&D programme moves between legal entities - through a restructure, a subsidiary formation, or a change of trading entity - the question of which entity holds the claim, and for which period, is not always straightforward. Prior year claims can be affected. Future year eligibility can be too.
These are not edge cases. They are normal features of growing NZ businesses, and they are the situations where a wrong answer is most expensive.
When we are uncertain, we ask IRD directly. Rather than guessing at a novel situation or taking a position that might not hold up, we go to the source. IRD will provide informal guidance on specific factual situations, and for higher-stakes questions a binding ruling is available. This is how we de-risk the process - not by assuming we know the answer, but by confirming it. It takes longer. It is worth it.
A Case We Saw Recently
A client came to us after their accounting firm - a reputable firm, not a small practice - advised them that they could not access the RDLTC.
We read the situation differently. The criteria for the RDLTC are specific, and we did not believe the firm's reading was correct for this client's circumstances. Rather than simply telling the client our view, we went back to the source: we checked directly with Inland Revenue.
IRD confirmed the client was eligible.
We proceeded to structure and file the RDLTC claim. The client received credits they had been told were unavailable to them.
We are not citing this to criticise the accounting firm - misreading the details of specialist tax schemes is easy when those schemes are not your primary focus. General accounting practices see a lot of clients across a lot of areas. R&D tax credits are a narrow specialism.
The point is this: if you have been told you cannot access a scheme, it is worth getting a second opinion before accepting that as final. The cost of a misread is real - not just in the credits missed for that year, but in the years prior if retrospective relief is possible.
How to Decide
DIY makes sense if you have the time, an appetite for reading tax and IP legislation, and are comfortable writing technical narratives for government review. Many founders do it well.
It stops making sense when the time cost exceeds the cost of getting help, when you are not confident the claim is complete, or when a second opinion on eligibility would be valuable.
The schemes themselves will not tell you whether you are leaving money on the table. That requires someone who knows what a complete claim looks like and can compare it to what you have.
If you want to understand your eligibility before committing to anything, get in touch. We will give you a straight answer on whether the scheme fits and whether the numbers make sense for your situation.