[cperciva]

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.

[unconed]

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.

[chrisdinn]

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.

[erohead]

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.

[wildmXranat]

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.

[skylan_q]

From what I've heard, they're getting rid of tax credits and moving more to an RFP or grant-based system.