There’s a reason it’s called a tax incentive.
The R&D Tax Incentive (RDTI) isn’t just a refund – it’s designed to motivate action. Specifically, to incentivise New Zealand businesses to invest more into research and development. Why? Because when businesses innovate, economies grow.
At its core, the RDTI is about accelerating that growth – by helping Kiwi companies fund innovation, expand their capabilities, and take bold steps forward.
Now, more than five years in, the RDTI is showing strong signs that it's achieving what it set out to. A recent independent evaluation of the incentive showed that:
- The programme supported about 1,752 businesses over its first five years.
- It’s expected to generate $1.83 billion in additional R&D spending that wouldn’t have happened otherwise.
- For every dollar of tax support, businesses spent an extra $1.40 on R&D – a clear sign the incentive is working.
- The estimated total economic return? $6.77 billion – more than four times the cost to government.
These figures show the RDTI is delivering on its promise – incentivising action, driving investment, and amplifying innovation across the economy.
So, what does that reinvestment actually look like? At Swell, we’ve helped some of the country’s most innovative businesses tap into the RDTI – and we’ve seen the results first-hand. Here are five of the most common, strategic ways companies are putting their R&D tax credit to work.
1. Accelerating Innovation
For many businesses, the RDTI provides the ability to move faster on big ideas. Whether it’s developing a new product, testing a bold hypothesis, or solving a complex technical challenge – reinvesting the tax credit can turn “someday” projects into today’s priorities.
We’ve seen companies use their credit to:
- Launch pilot programs ahead of schedule
- Invest in deeper, more rigorous R&D work
- Fund rapid prototyping or extended trials
This acceleration doesn’t just speed up timelines – it often results in more competitive products, stronger IP, and quicker routes to market. The incentive works exactly as intended: reducing financial barriers so innovation can move forward at pace.
2. Purchasing New Equipment
R&D often relies on specialised tools, technology, and infrastructure – but this kind of equipment can come with a hefty price tag. By reinvesting their RDTI credit, many businesses are able to unlock capital investments that would otherwise be out of reach.
We’ve worked with companies who have used their R&D tax credit to:
- Purchase high-precision testing rigs or diagnostic tools
- Install next gen manufacturing equipment
- Upgrade laboratory or workshop facilities
This kind of reinvestment doesn’t just improve what a business can do – it often reshapes how they innovate, giving teams more autonomy, capability, and confidence to explore new directions.
3. Hiring Staff
R&D doesn't happen without people. One of the most impactful ways businesses reinvest their RDTI credit is by bringing in new talent or extending existing contracts. These investments in people can significantly increase the depth, speed, and quality of innovation.
We’ve seen businesses use their credit to:
- Hire engineers, scientists, or product specialists
- Bring in contractors for short-term research projects
- Retain key team members during uncertain phases of development
In a competitive talent market, the RDTI helps give businesses the flexibility to resource their teams properly – making it easier to scale R&D, reduce bottlenecks, and build knowledge that lasts beyond a single project.
4. Market Development
Innovation doesn’t end with the prototype – it needs to reach the market to make an impact. Many businesses use their RDTI credit to support the critical transition from R&D to commercialisation, where additional investment is often required.
Reinvestment in this phase commonly includes:
- Compliance testing and product certification
- Customer trials and pilot deployments
- Research into new market segments or geographies
While not always considered traditional “R&D,” these steps are essential for translating technical progress into business outcomes. The RDTI helps businesses go further – ensuring that innovation isn’t just developed, but scaled and delivered into the largest, most valuable markets possible.
5. Extending Cashflow for Breathing Room
For early-stage businesses, cashflow is often the biggest constraint on innovation. You can only build the future if you can afford to keep the lights on, pay your team, and buy time to solve hard problems. That’s why the RDTI is so powerful – it creates breathing room when it’s needed most.
Startups often use their RDTI credit to:
- Cover core operating costs while developing IP
- Maintain momentum between funding rounds
- Delay or reduce the need for dilution through equity raises
In this context, the incentive is more than a refund – it’s a strategic financial buffer that helps ambitious businesses stay focused on innovation, not survival. For many, it’s the difference between pausing progress and pushing forward.
How to Access the RDTI – With Confidence
Claiming the R&D Tax Incentive should be empowering, not overwhelming. At Swell, we specialise in making the process simple, strategic, and stress-free.
Our team brings together deep expertise across technical, financial, and commercial domains – ensuring that every claim is not only compliant, but also complete. That means no missed opportunities, no guesswork, and no funding left on the table.
If you’re curious about whether your business qualifies, let’s talk. We offer a no-obligation discovery call to help you understand your eligibility and explore what’s possible.