BlueRock helps entrepreneurial SMEs access thousands in R&D tax incentives
NZ Entrepreneur Magazine
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Two Christchurch-based business advisors are facilitating innovation and growth in Kiwi SMEs and early-stage companies by helping them access thousands of dollars in tax incentives they would otherwise have missed out on.
BlueRock, a multidisciplinary Australian advisory firm, expanded to New Zealand in 2022. Led by Christchurch-raised director Tom Moore, the business aims to help innovative New Zealand businesses and startups secure government grants and tax incentives.
With a primary focus on research and development (R&D) funding, BlueRock prepares grant applications and tax incentive claims on behalf of Kiwi entrepreneurs looking to fund their business innovation projects. Clients engage BlueRock for its expertise, recognising the value of a service that not only saves them time but also delivers strong, reliable results.
BlueRock is headquartered in Melbourne, where it has emerged as a fast-growing network of business and private wealth advisors. The firm gets its name from a combination of the Carlton ‘Blues’ Australian Rules football club, and American professional wrestler Dwayne ‘The Rock’ Johnson.
Designed and run by entrepreneurs - referred to as ‘Blue Rockers’ - Moore says the company was founded on the vision that ‘If you do things you love with people you care about, good things happen’.
Moore initially worked for BlueRock in Australia after learning this field when working as an R&D tax consultant with a top UK firm. He spearheaded the creation of BlueRock in New Zealand and shortly thereafter he partnered with Dr Corey Laverty, a grant funding specialist who has also repatriated to New Zealand after spending time in Germany and Australia.
“I was in Melbourne during the Covid lockdowns and wanted to move home. So, we accelerated the expansion of BlueRock and launched it as a disruptive startup here in New Zealand,” he explains, noting that he also still leads BlueRock’s Australian R&D and Incentives team of 12 advisors.
“Meeting Corey was serendipitous. We were both in the right place at the right time. He has a wealth of experience and expertise, and the New Zealand business community is fortunate to have him here.”
Moore says BlueRock is focused on three key funding programmes to incentivise businesses to conduct R&D locally. Under these programmes, innovators can receive between 15 and 57 percent as ‘cash back’ through tax incentives.
“While these programmes are more accessible than many people realise, they can be challenging to navigate, which is where BlueRock assists in helping you understand the complexities and complete the applications correctly.”
Moore says there are more than 2,000 businesses in New Zealand that report they are conducting R&D, but fewer than half are claiming the available tax incentives. However, in two years BlueRock has supported 20 clients through R&D funding programmes, raising $6m for a combined $25m of funded innovation projects.
“The government has grant programmes for business, but they are less known than they should be. We’re seeing many NZ businesses who are not fully claiming the funding that is available to them, meaning some are missing out on tens or hundreds of thousands of dollars they are entitled to,” he says.
“Our typical client is a business that is investing and developing an innovative product, service or process, so our goal is to increase the funding accessible to these Kiwi innovators whose ideas are going to have world-changing impacts in their field.”
Judith Collins, the Minister of Science, Innovation and Technology, has noted that more than 1,000 businesses have received tax credits, supporting more than $3.3B dollars of business investment in R&D.
However, Moore believes it could be so much more.
He says one heavily underutilised opportunity is the ‘New to R&D grant’ for early- stage investors. This includes a grant up to $400k to fund 40 percent of a proposed R&D project and to develop R&D capacity, provided a business has had no other recent government R&D funding.
“While this has been available since 2022, just 65 businesses have received this grant, despite it targeting all new technology innovators,” he says.
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“For the first time, very early founders can now apply for this even before securing other funding, thus flipping the traditional process on its head.”
Another programme offers tax offsets equal to 15 percent of R&D expenses in addition to the 28 percent cash-out for loss making businesses.
Offsets are accessed by making an application that describes the R&D project and activities, and while businesses and startups incur costs, the government will back them up and part-fund that cost when the R&D expenditure is reported in tax returns.
“By design, these programmes have tricks and trapdoors, so if you’re unsure about anything, it’s worth seeking professional advice,” Moore says.
Moore cites one young Kiwi startup whose innovative consumer electronics invention is flying off the shelves. It received some trusted advice from a national accounting firm that an R&D claim wasn’t worthwhile.
Moore sat down with the company leadership team, discovered their approach was globally unique, and secured them $200k in R&D refunds. That was enough to hire another engineer to the development team, thus assisting the startup to accelerate its international expansion.
Moore says that some of BlueRock’s clients have attempted to access funding but have been knocked back as their applications did not paint the business in its best light.
“What we do is circle back in and talk about the innovation itself, so what we might uncover is that they actually should qualify,” he says.
“We have found that this field is not black and white. Projects are complex, and in some cases a business must pitch business activities and so aim to tell a story and pitch business activities in a certain way to make them eligible for funding programmes. This is where we can really add value.”
BlueRock also assisted an emerging business that received $2m in cash refunds but had missed out on much more. The business had run multi-million dollar losses after heavy R&D investment over several years and had previously missed out on up to $4m in lost refunds that were not applied for. for. Again, this company had a trusted accountant, but they never flagged the opportunity.
Moore says while big accounting firms deal with large corporates, many business leaders working in or with startups or SMEs don’t necessarily have the knowledge to put the business forward in the best way to receive the funding.
“Other accountants don’t have the specialty, they have many topics to focus on, we’ve only got one - and we do the best job we can, to get the best result.”
Story by Dave Crampton
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