Accountant for Victoria tech startups

Founders who are still billing as independent contractors should read the Victoria consultant page first. The Victoria accountant page covers the wider BC picture.

Building an SR&ED claim a reviewer will accept

The federal SR&ED program pays for work aimed at a technological advance, where the answer was not known at the start and the team found it through planned experiments. A machine-learning model that would not converge, a sensor that had to work in cold salt water, a new data structure that had to scale — these can qualify. Standard development with known tools usually cannot.

The claim goes on Form T661 with the T2. What holds it together is evidence created at the time: the hypothesis, what was tried, what failed, and who spent how many hours on it. We set up a light routine for engineers to tag their time and link it to project notes, so the claim is written from records. BC offers its own SR&ED credit on top of the federal one, claimed through the same return. See the SR&ED expenditure limit update for recent changes.

Keeping the enhanced credit refundable

A Canadian-controlled private corporation can earn an enhanced SR&ED credit that is refundable, so it comes back as cash even before the company has profit. For a Victoria startup living on a seed round, that refund can be months of runway.

Control decides it. If non-residents or public companies end up controlling the corporation, in law or in practice, the company stops being a CCPC and the enhanced refund goes with it. Flipping to a US holding company for a financing, or giving a foreign investor voting control, are the usual causes. Review the structure before the lawyers finish the documents; afterwards the options are narrower.

Grants, assistance and the net base

Startups in Victoria often combine federal research contributions, provincial programs, and wage subsidies for students. Government and non-government assistance for a project generally reduces the SR&ED expenditures on the same work. That is not a reason to turn down a grant. It is a reason to record every grant against its project in the monthly books, so the claim is calculated on the net figure and the CRA reviewer sees a clean trail.

Paying founders and granting options

Salary paid to a founder doing qualifying technical work can be included in the SR&ED claim; dividends cannot. Salary also builds RRSP room and CPP, and it requires a payroll account from the first cheque, with WorkSafeBC coverage for employees. A modest salary to technical founders is often the right starting point. The salary versus dividends calculator models it, and payroll in Victoria covers remittances.

Options in a CCPC get favourable timing: the employee is generally taxed when the shares are sold rather than when the option is exercised, and a deduction may reduce the benefit where the conditions are met. That treatment depends on an option plan, board approval and a recorded share value at each grant. Keep those records from the first grant.

GST, PST on software, and customers abroad

Most Victoria startups register for GST early, both to charge it and to recover GST on their own costs. Services and software sold to businesses outside Canada are generally zero-rated, so no GST is charged but credits are still claimed. BC PST is different from other provinces’ sales taxes in one way that matters here. It applies to software sold in BC, including software delivered electronically. A SaaS company with BC customers should therefore confirm whether it must register for and collect PST.

GST filing in Victoria covers the federal return, and the BC PST guide covers provincial registration. Foreign-currency revenue adds exchange gains and losses to the year-end; the foreign exchange guide explains them.

What EverStone handles for you

One CPA, one fixed fee agreed up front:

• T2 corporate return and year-end financial statements
• SR&ED claims on Form T661 with the BC credit
• CCPC status reviewed before financing
• Grants recorded against projects
• Founder salary, payroll and option records
• GST and PST registration and filings

Fixed fees, fully online

We share your time zone, and nothing requires a ferry. Monthly bookkeeping starts from $300 a month with GST filing included; a fractional CFO for investor reporting and runway starts from $2,500 a month. The T2 and the SR&ED claim are quoted after a free consultation. See what it costs, and financial statements in Victoria for what investors and lenders expect.

Remote accounting for tech startups from Abbotsford

EverStone is a sole practitioner CPA firm at 32615 South Fraser Way in Abbotsford, serving Victoria businesses entirely online. There is no Victoria office and no local staff. Meetings are held by video or phone, documents are exchanged securely by email, e-signature and a secure upload link, and no visit is required at any point. SR&ED records, payroll and investor reporting are handled from the tools your team already uses.