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from reddit: SR&ED is [reorganized.] Whew, so it's not completely axed. If anything Canada needs significantly more investment and tax programs like this.

by dstein 14y ago

from reddit: SR&ED is [reorganized.] Whew, so it's not completely axed. If anything Canada needs significantly more investment and tax programs like this. Brain drain has always been a problem for Canada because of the lack of investment from the government and the lack of tech-oriented VC.

cperciva 14y ago
I was hoping for SR&ED to be completely axed. It's a huge monstrosity of paperwork, to the point that small businesses pay 30% of their tax credits to consultants who fill out the forms for them and large businesses hire teams of people for the sole purpose of tracking and classifying SR&ED expenses so that the tax credits can be claimed. I suspect that Tarsnap is eligible for some SR&ED credits, but it's simply not worth the time and headaches it would cost me to claim them. If Canada wants to encourage innovation, they should set up a system which rewards people for doing new and innovative things, not a system which rewards people for being good at filling out forms.
- erohead 14y ago
  Talk to Ernst & Young. They will help startups file for SR&ED for a flat fee of $1-3k. Takes a few hours to draft the document with their help. It is not as hard as it sounds.
- chrisdinn 14y ago
  I've successfully written SR&ED applications myself for businesses certainly less deserving than Tarsnap. We decided the consultants were too expensive and gave it a shot ourselves. One solid week of work for one guy at a company of 10 people netted $30,000, definitely worth the time. All you need is a decent record of work done (I used both github commit log and a bug tracker.) Unfortunately I expect you'll never get money from a bureaucrat without a little paperwork. Still, you're missing out if you don't even try.
- wildmXranat 14y ago
  While it is a big headache to trac, document work and formulate and application, it is most definitely worth it. I've been part of a team that has claimed small sr&ed pieces of work and managed to get back a substantial credit. I agree that there should be a more stringent vetting of applications as this is our tax payer money we're talking about.
- unconed 14y ago
  I've filed SR&ED claims for multiple years for a successful startup. It was a) incredibly valuable and b) incredibly easy. That said, I do know there are plenty of zombie companies that filed SR&ED claims with a bunch of handwaving and hogwash in it. In fact, it was recommended to me to not make any project sound like it's finished: that way, you can file again next year. But if you waste 30% of your credit on consultants, you're the one being an idiot, not the government.
- skylan_q 14y ago
  From what I've heard, they're getting rid of tax credits and moving more to an RFP or grant-based system.
mcantelon 14y ago
From skimming the news it seems like it's cut significantly. >The changes include a cut in 2014 to 15 per cent from 20 per in the tax credit rate and a restriction on which expenditures count toward the credit. For example, capital expenditures – buildings, equipment and product prototypes – will no longer be eligible. The amount of eligible overhead expenses and subcontracted R&D will also be reduced. http://www.theglobeandmail.com/report-on-business/economy/growth/tories-target-lagging-innovation-with-funding-overhaul/article2386039/ http://www.theglobeandmail.com/report-on-business/economy/gr... Bad news for Canada's tech innovators.

by dstein 14y ago

cperciva 14y ago

I was hoping for SR&ED to be completely axed. It's a huge monstrosity of paperwork, to the point that small businesses pay 30% of their tax credits to consultants who fill out the forms for them and large businesses hire teams of people for the sole purpose of tracking and classifying SR&ED expenses so that the tax credits can be claimed. I suspect that Tarsnap is eligible for some SR&ED credits, but it's simply not worth the time and headaches it would cost me to claim them. If Canada wants to encourage innovation, they should set up a system which rewards people for doing new and innovative things, not a system which rewards people for being good at filling out forms.

erohead 14y ago
Talk to Ernst & Young. They will help startups file for SR&ED for a flat fee of $1-3k. Takes a few hours to draft the document with their help. It is not as hard as it sounds.
chrisdinn 14y ago
I've successfully written SR&ED applications myself for businesses certainly less deserving than Tarsnap. We decided the consultants were too expensive and gave it a shot ourselves. One solid week of work for one guy at a company of 10 people netted $30,000, definitely worth the time. All you need is a decent record of work done (I used both github commit log and a bug tracker.) Unfortunately I expect you'll never get money from a bureaucrat without a little paperwork. Still, you're missing out if you don't even try.
wildmXranat 14y ago
While it is a big headache to trac, document work and formulate and application, it is most definitely worth it. I've been part of a team that has claimed small sr&ed pieces of work and managed to get back a substantial credit. I agree that there should be a more stringent vetting of applications as this is our tax payer money we're talking about.
unconed 14y ago
I've filed SR&ED claims for multiple years for a successful startup. It was a) incredibly valuable and b) incredibly easy. That said, I do know there are plenty of zombie companies that filed SR&ED claims with a bunch of handwaving and hogwash in it. In fact, it was recommended to me to not make any project sound like it's finished: that way, you can file again next year. But if you waste 30% of your credit on consultants, you're the one being an idiot, not the government.
skylan_q 14y ago
From what I've heard, they're getting rid of tax credits and moving more to an RFP or grant-based system.

mcantelon 14y ago

From skimming the news it seems like it's cut significantly. >The changes include a cut in 2014 to 15 per cent from 20 per in the tax credit rate and a restriction on which expenditures count toward the credit. For example, capital expenditures – buildings, equipment and product prototypes – will no longer be eligible. The amount of eligible overhead expenses and subcontracted R&D will also be reduced. http://www.theglobeandmail.com/report-on-business/economy/growth/tories-target-lagging-innovation-with-funding-overhaul/article2386039/ http://www.theglobeandmail.com/report-on-business/economy/gr... Bad news for Canada's tech innovators.