R&D Tax Credits and Knowledge Hunting

On 24th of April there were two guests. Colin De Freyne of EY and Geoff McDowell from Bridge Ellis

Colin covered a number of topics including a very high level scan of limited partnerships* now available in NZ and the advantages of using them as well as a q&a around the conundrum of equity as part payment for fees. (* Limited Partnerships Act goes live on May 02, 2008 in NZ – see quote below.)

“The primary objective of the introduction of the Limited Partnerships regime in May 2008 is to facilitate sustainable growth in New Zealand’s venture capital and private equity industries.”

The impression on the equity scenarios was that partly paid shares should be near the top of the list when reviewing options but no magic bullets so check with your advisor.

Colin is a Director of the RESEARCH & DEVELOPMENT TEAM at EY and his core topic was the new Research & Development Tax Credit Regime.

“For many businesses the R&D tax credit is a welcome tax benefit. 15% of qualifying expenditure can be claimed as a credit against tax payable or, potentially, as a cash refund. To take full advantage your business needs to maximise its ability to identify and track qualifying activities and expenditure.

Ernst & Young’s R&D team can help businesses maximise their R&D claims.”

…and

“The areas of qualification fit all New Zealand companies which undertake R&D and software development.

The regime is perhaps more relevant to locally-owned enterprises as the resulting Intellectual Property must be New Zealand owned, but it is likely to also apply to inbounds also.”

The credit applies from 1st of July 2008 although could be in effect earlier depending on tax year. It is in effect a rebate of 15% of allowable R & D expenditure which can be claimed in cash if the entity has no tax liability.

The presentation also covered off eligibility, activities which qualify as allowable R&D, excluded activities, level of documentation and record keeping and the claim process. Check their website for more information like this summary or this list and contact Colin regarding specific assistance where required.

Geoff McDowell introduced his firm – Bridge Ellis – The Knowledge Hunters. To quote from their website

“Do you need:

* an expert in a particular field?
* a detailed competitive analysis of your marketplace?
* ongoing market intelligence on the subjects and trends of your choice?

Bridge Ellis can help. People think of us as knowledge hunters because that’s exactly what we do.

Whatever your taste in knowledge, we hunt it down and present it for your consumption. Knowledge is, after all, the lifeblood of any organization.”

Geoff then spoke about social networks covering trends, mentioning cultural relevance as a driver and the inherent conflict between one to one and the actual ‘many to many’ scenarios experienced on some of the larger sites. Also the difference between internal (ISN) or external (ESN) social networks which tend to be more advertising driven and some discussion around business models. Not sure where the following quote came from

“The value of a network is not defined not only by who’s on it but by who’s excluded.”

Customer facing companies need to have a social network engagement strategy so they can learn about and leverage the areas of consumer interest and participation.

Two of the meta search engines Geoff mentioned are Pipl and Wink

Contact him for more detail if needed. Gary also mentioned golf.

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