Speak With Tyler Bryden
Speak With Tyler Bryden
The Scientific Research and Experimental Development (SR&ED) Program
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Daily Standup 11

  • The Scientific Research and Experimental Development tax incentives
  • Funding and de-risking innovation in Canada with the program
  • Working with a good SR&ED consultant like think.SRED
  • Ensuring good documentation for easy submissions and audits
  • Make new SR&ED consultant friends by putting “AI” in your company name 😂

#sred #sredclaim #taxincentives #canadastartup #startupfunding #nondilutivefunding #nondilutivecapital #funding #innovation #development #irap #nrcirap

Resources

https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/overview.html

https://www.thinksred.com/

 

Automated Transcription

All right, got it right here. Hope everything’s going well today. I want to talk about shred. There’s a long name for it. It is the scientific research and experimental development tax incentive government with their long names. But this is one of the favorite programs. If you are in Canada and if you are a company. If you’re a startup, everybody loves non dilutive capital, and I just wanted to talk about this a little bit today because, well, first of all, we’re in the process of submitting our shred claim for this year. This is a program that can do a lot for you. Actually, if you’re in sort of experimental development, if you’re doing AI machine learning lots of applications and hardware products and things like that as well too, and so the quick disclaimer, I am not a shred consultant. There are so many nuances and intricacies to this that I don’t want to speak in that the other disclaimer is that if you want to make friends, put AI or something in your company profile and you will have.

A wonderful steady stream of shred consultants come your way and send you a message on LinkedIn. They’ll start calling you on the phone. They’ll start emailing you there is a business that thrives around submitting these shred claims and anything from small firms up to a PwC. And all these things. So lots of companies taking advantage of this. I’ll share even what you can see on the screen here. You type in, shred on Google. You can see the ads are live and it’s because.

Generally what’s happening is that should consultants are operating on. I don’t know if the term would be commissioned, but a percentage basis of the final claim that they submit. So someone claims $100,000 that $100,000 is improved, approved that that consultant will get, say, 15%. I believe 15% to 20 percent, 20% being on the high end is pretty typical. And then as you start to go to a higher amounts, I believe the percentage amount decreases.

So this year for us, here at Spki, it’s our third year submitting our shred claim and. Well, I think there’s just a couple important things to think about this, which is if you do a good job documenting your development process. If you’re using tools like GitHub, Trello if you’re doing product requirements, documents, those things all compound and add up to make the final submission much you know much more easy, but also the sort of trail of paper if an audit ever comes, and typically the the lesson there or the the feedback that we’ve heard is that an audit will come. At some point and you will even have the experience of talking to a shred a representative from the government. We had our meeting this year, which is after your first red claim. They will reach out and you will have sort of a question answer session as well as you know, just sort of a an explanation of what shred is, why it’s here. Who does it serve? How does it work and all those things, and so I’ll quickly just go through a little screen share. If there’s anything that jumps out at me.

Then I’ll hop on it, but. I’ll share this link as in a resource and you can check it out and if you’re using, if you haven’t used this, definitely encourage you to explore. And if you are already well, then you know this information, but a lot of people don’t, so that’s why I want to talk about it today and again. If you have any other insights or feedback or thoughts on it, please please let me know. So hop in quickly thing what you can claim. So again, this is from my understanding, not shroud consultant. We work with a great team.

This gonna be money for sharing this. I think shred. They originally met them through the DMZ and they’ve done a fantastic job. Sort of submitting shred claims, doing a lot of good work for us and helping us navigate through this process, which can be pretty burdensome at the start, and I think that is why there is such a large sort of industry that has emerged from it and I believe it’s about $3 billion every year. They say about 16,000 claimants that are going out and then.

Talk about sort of what work is eligible and and typically this. You know this really interesting sort of thought is that if you’re going beyond sort of. Like this is weird, but like a five page Google search or you’re searching for 30 minutes and there is no solution available today and you are now entering this exploratory zone of development. You are then. Navigating into this shred eligible work and then there’s, you know ideas of what specific kind of work are available. If you’re a software business has generally just the, it’s just the salary and wages of it. But if I’m sure if you’re in hardware, there are other things that are claimed, and then there are a couple other pieces that I think are you know, really interesting which is they. They are generally pretty streamlined in returning doing the review and then.

Then then giving the money back and so we’ve seen less than 60 days. I don’t know what that will look like this year with with everything that’s obviously going on there. You know, I don’t know if there’s delays and what they’re doing. Are our goal is to submit within the first couple weeks of May, and generally you can expect to see that shred return in in May or in. Sorry in June. And then you can see 3 billion in tax incentive over 16,000 claims. And really, and it’s so it’s the largest federal program.

That supports business are and in Canada. So CRA you’re dealing with the big the big squad there. And just generally it speaks to the dry for Canada to fund innovation. It is definitely a way to derisk and fund it. It allows you to take risks that you might not necessarily take. Obviously there are circumstances where this program gets abused. It’s there’s a stories from even talking to the representative from shred that we talked to shared about sort of falsified documents and fraudulent activities being claimed. And so there is definitely this this.

Piece of this, but overall it’s a really valuable program that a lot of Canadian companies are using to fund that innovation. And apparently there are companies that even move to Canada are set up specific headquarters in Canada so that they can access programs like this, and I think that you know strategy makes makes a lot of sense and between between shred and then another program that I’ll talk about maybe later, which is NCI rap. There are a lot of opportunities to. Fun, the work that you’re doing and as you know it doesn’t matter how far along are you in a business. Anytime you can inject sort of non dilutive capital or tax incentives into the business that gives you a huge amount of opportunity that you wouldn’t necessarily get in other countries. So there’s definitely a safety net as you build companies here in Canada, and we’ve been lucky enough where these these claims have come in and a timely manner. And then we’ve used them to continue our growth. Continue funding our innovation.

And we know that it gives us confidence to continue on that path because we can leverage leverage programs like this. So I think I’m beating the beating the Bush here that that that is all I really can contribute to this piece. If you are looking for advice on shred, look to the millions of Sri consultants on LinkedIn. The thing shred, they are a great team. I know boost AI is operating the space and there’s many, many more. Lots of them with good intents and actually want to help.

And then of course you have to be a little careful, because what if you want to work with a credible firm who submits your claim for you? And then that makes everything else better? If they’ve had no problems, they’re doing a good job with their process. They’re submitting. Everything should flow pretty smoothly. I know there are companies that do it themselves, but for us it’s just not something that we want to do at this moment, maybe. Maybe in the future, but for now we’re really happy with the helpful things. Shred and we look forward to.

Finalized an airplane this year and pushing forward, so that’s all I got to talk about. It’s a shorter, shorter video here today, but I hope this was helpful. If you have any questions around this feel encouraged to shoot me a message or the, again, the innumerable amount of resources online to help you access these programs. Thank you so much. Hope you have a great day

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