Reflecting on our conservative philosophy, Swanson Reed is committed to transparent fee structures that mitigate risk. We prioritise hourly or fixed-fee engagements because a contingency model creates an incentive to maximise claim values, a motivation that directly conflicts with our conservative approach to claim preparation and risk management.

While fixed fees are our standard practice, we can offer contingency fees in limited circumstances for experienced clients who fully understand the risks involved in the New Zealand R&D Tax Incentive (administered by Inland Revenue). In these cases, we will apply a separate risk policy, per the guidelines of our ISO:31000 Risk Management accreditation (see table below), and where relevant ‘Chinese walls’ or virtual barriers will apply to all staff involved in the relevant claim, ensuring each is focused on their own specific tasks and that the contingency arrangement is not causing any conflict.

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Software Development Claim | Fee Example | IRD R&D Incentive Review

  • The Project: A Wellington-based tech start-up is creating a new cloud platform that uses machine learning to predict supply chain disruptions in real time.
  • The Uncertainty: The team isn’t sure how to train models on limited regional data sets while maintaining prediction accuracy. They try multiple approaches, including new data cleansing and feature engineering methods.
  • The Claim: The company may claim the New Zealand RDTI for the time and costs associated with experimentation, testing, and development of the predictive model, provided the activities meet Inland Revenue’s definition of eligible core or supporting R&D activities.
  • Job Scope: This client has prepared their own claim and wants a third-party review. The client hired one of Swanson Reed’s consultants to review their claim for 2 hours.
  • The Fees: NZ$195 x 2 hours = NZ$390

 

Food & Beverage Claim | Fee Example | IRD R&D Audit Documentation Response

  • The Project: A food manufacturer in Auckland wants to create a new line of dairy-free yoghurts with a longer shelf life and improved texture.
  • The Uncertainty: The team is uncertain which natural stabilisers and fermentation processes will maintain taste and consistency over time. Multiple trials are undertaken with different cultures and processing techniques.
  • The Claim: The company can claim the New Zealand RDTI for the time and costs spent on testing, formulation, and experimentation to resolve the scientific and technological uncertainty, subject to IRD eligibility criteria.
  • Job Scope: This client has received an IRD query letter and has asked a Swanson Reed director to prepare their third response. It takes 2 hrs to prepare the supporting documentation.
  • The Fees: NZ$395 x 2 hours = NZ$790

 

Manufacturing & Engineering Claim | Fee Example | R&D Technical Consulting Assistance

  • The Project: An engineering company in Christchurch is developing a new type of earthquake-resistant building material.
  • The Uncertainty: The team is unsure which composite mix will maximise structural integrity while remaining cost effective. They conduct iterative lab testing and pilot manufacturing trials.
  • The Claim: The company may claim the costs related to salaries of engineers, laboratory testing, and materials used in the experimental trials, provided the activities meet IRD’s definition of core or supporting R&D activities.
  • Job Scope: This client has asked for one of our directors with a professional engineering qualification to conduct a 1 hr training session with their engineering team on Inland Revenue’s R&D eligibility requirements.
  • The Fees: NZ$395 x 1 hour = NZ$395

 

Our ISO31000 Risk Management Compliance Framework to ensure Fee Transparency and a Conservative approach

The table below consolidates the key elements of Swanson Reed’s trust and compliance framework, detailing their implications for clients.

Framework Element Description Implication for Clients
Six-Eye Review A mandatory internal review of every claim by a qualified engineer, a scientist, and a Chartered Accountant (CA ANZ). Ensures the claim is technically robust, financially accurate, and compliant with Inland Revenue’s guidance, maximising defensibility in the event of an audit.
ISO 31000 (Risk Management) Where a contingency or success fee cannot be avoided, a separate internal conflict register for staff involved in the claim that meets ISO31000 standards. Provides objective, third-party validation of the firm’s commitment to mitigating client tax risk.
ISO 27001 (Information Security) A leading global standard for establishing and maintaining an information security management system (ISMS). All staff will have virtual barriers and focus only on their part of the claim. They will not have access during the engagement to other staff members working on costing segments of the claim. Guarantees the highest level of protection for sensitive intellectual property and confidential financial data.