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  1. #31
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    Quote Originally Posted by elZorro View Post
    UU, too black and white - in fact I applied for my own R&D tax credit and it took me ages. It would have been a bit easier in future. I received a few thousand dollars (15% of my actual costs), one of just 300 applications. Another business I knew was audited, two bods flew in. They passed. Don't believe all you read, yes, the official line from National was that it would be rorted. Crap, utter lies. It was just a great policy, they couldn't admit it.

    I'm still getting patents sealed from that work in 2009, I intend to have a lot more control over my business in future. If a lot more businesses did that after a small incentive, maybe the country would get somewhere. Do you have a better policy for the 450,000 small businesses in NZ? I would like to hear it.
    Credit for wages paid, credit for rent paid, electricity, advertising, how abut a credit for accounting work? You name it. Each one is as valid as R+D credits. Most businesses accept that there are costs and overheads to meet, and do not expect special treatment. Your mates, the Labour party, in one of their rare bursts of sanity, got rid of most business subsidies in the 80s. Good on them for that.

  2. #32
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    Quote Originally Posted by fungus pudding View Post
    Credit for wages paid, credit for rent paid, electricity, advertising, how abut a credit for accounting work? You name it. Each one is as valid as R+D credits. Most businesses accept that there are costs and overheads to meet, and do not expect special treatment. Your mates, the Labour party, in one of their rare bursts of sanity, got rid of most business subsidies in the 80s. Good on them for that.
    OK, here's how it works FP. The R&D work hours are totalled up from worksheets and the costs for that depend on which staff do the hours. Parts and external costs are brought in. Then the proportion of the hours spent on R&D compared to the whole business operation hours is used as a multiplier for the overhead costs. So if R&D uses up 20% of the firm's time, then you could claim 15% of 20% of the overheads, or 3% of the overheads. That's one big rort isn't it. Oh, and be ready for an audit on that calculation. This method is only acceptable if you have multiple projects where it would otherwise have been difficult to split out actual overhead costs. The formula was hidden deep inside one inch of printed documentation.

    R&D tax credits were meant to grab the attention of business owners. At 12.5% it would be a small but clever incentive to smarten up business in NZ. That's what we all need really.

  3. #33
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  4. #34
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    Quote Originally Posted by elZorro View Post
    UU, too black and white - in fact I applied for my own R&D tax credit and it took me ages. It would have been a bit easier in future. I received a few thousand dollars (15% of my actual costs), one of just 300 applications. Another business I knew was audited, two bods flew in. They passed. Don't believe all you read, yes, the official line from National was that it would be rorted. Crap, utter lies. It was just a great policy, they couldn't admit it.

    I'm still getting patents sealed from that work in 2009, I intend to have a lot more control over my business in future. If a lot more businesses did that after a small incentive, maybe the country would get somewhere. Do you have a better policy for the 450,000 small businesses in NZ? I would like to hear it.
    I work for a big four accounting firm. Other ideas? I guess ones that are well costed and target genuine business needing to take the money to take that 'next step' with the risk. If businesses were going to do it already (i.e. the project), I don't see any reason for a tax credit.

  5. #35
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    Quote Originally Posted by elZorro View Post
    OK, here's how it works FP. The R&D work hours are totalled up from worksheets and the costs for that depend on which staff do the hours. Parts and external costs are brought in. Then the proportion of the hours spent on R&D compared to the whole business operation hours is used as a multiplier for the overhead costs. So if R&D uses up 20% of the firm's time, then you could claim 15% of 20% of the overheads, or 3% of the overheads. That's one big rort isn't it. Oh, and be ready for an audit on that calculation. This method is only acceptable if you have multiple projects where it would otherwise have been difficult to split out actual overhead costs. The formula was hidden deep inside one inch of printed documentation.

    R&D tax credits were meant to grab the attention of business owners. At 12.5% it would be a small but clever incentive to smarten up business in NZ. That's what we all need really.
    It's got nothing to do with the calculation method. You're obviously interested because this is the area you dabble in. But it's unfsir to tax one business and hand that money to another business.

  6. #36
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    UU: I think you will find the R&D tax credits were costing a lot more than that. $700m rings a bell. Plus, it wasn't as though this was hugely productive use of the money - accounting firms were just using projects that clients had on their books to qualify for the tax credits and take a big cut of it. It was aimless spending....
    I'm disappointed with your opinions, FP and UU. I did notice accountancy firms on the web saying the R&D tax credits were difficult to do, best leave it to them. Well, if you have a decent cashbook with plenty of categories, it's not that hard. And no-one understands the R&D projects more than the staff and supervisor or owner of the business. By the time we totalled up what we'd done in a year that fitted the criteria, we were pretty proud of the work. We in fact produced some research findings at a tiny cost, from a little business, that any CRI would have been proud of. Sometimes our outputs look better than a CRI produces with their 5-year million-dollar prototypes. And here's the thing FP, the spending on these projects wasn't just internal, we outworked and networked, employed an extra uni student or two, and gave them some work experience. The tax savings or incentives were well spread out.

    Everyone says that NZ's R&D spend is too low compared to our GDP, and the govt portion is only 50% of other countries' percentages. I can tell you that the most efficient use for R&D funds will be in small, fast-acting businesses with low overheads. These businesses won't be using UU's firm for any type of tax minimisation, and they'll be ready for an audit if it is called for. Maybe the small firms don't have big sales channels ready for the outputs, but they have every right to work towards that goal. They can licence their ideas, sell them outright, or spend the five-ten years it might take to get the thing going.
    Last edited by elZorro; 03-12-2011 at 08:34 PM.

  7. #37
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    Quote Originally Posted by elZorro View Post
    I'm disappointed with your opinions, FP and UU. I did notice accountancy firms on the web saying the R&D tax credits were difficult to do, best leave it to them. Well, if you have a decent cashbook with plenty of categories, it's not that hard. And no-one understands the R&D projects more than the staff and supervisor or owner of the business. By the time we totalled up what we'd done in a year that fitted the criteria, we were pretty proud of the work. We in fact produced some research findings at a tiny cost, from a little business, that any CRI would have been proud of. Sometimes our outputs look better than a CRI produces with their 5-year million-dollar prototypes. And here's the thing FP, the spending on these projects wasn't just internal, we outworked and networked, employed an extra uni student or two, and gave them some work experience. The tax savings or incentives were well spread out.

    Everyone says that NZ's R&D spend is too low compared to our GDP, and the govt portion is only 50% of other countries' percentages. I can tell you that the most efficient use for R&D funds will be in small, fast-acting businesses with low overheads. These businesses won't be using UU's firm for any type of tax minimisation, and they'll be ready for an audit if it is called for. Maybe the small firms don't have big sales channels ready for the outputs, but they have every right to work towards that goal. They can licence their ideas, sell them outright, or spend the five-ten years it might take to get the thing going.
    It's a little like the music incentives and NZ quotas etc. Those schemes have never produced a Beethoven or Beatles, just as no R+D scheme will ever produce a Henry Ford or Steve Jobs.

  8. #38
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    Quote Originally Posted by fungus pudding View Post
    It's a little like the music incentives and NZ quotas etc. Those schemes have never produced a Beethoven or Beatles, just as no R+D scheme will ever produce a Henry Ford or Steve Jobs.
    So we shouldn't try at all? 450,000 small businesses each taking on a person for 20 hours on average would remove the dole queue. I watched The Nation and Q&A this morning. In a roundabout way just about everyone mentioned that to get us out of the mess we're heading for, we'll need better exports, smarter businesses. The person who conveyed that most clearly was David Shearer.

    I have a question for UU: with all those businesses going past your view each year, surely some of them show the gem of an idea for the way forward, or are they really at your firm solely to minimise tax?

  9. #39
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    Time to put this thread permanently to bed :-)

    National won.

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    Quote Originally Posted by Major von Tempsky View Post
    Time to put this thread permanently to bed :-)

    National won.
    Or keep it going till 2014 so elzorro can tell us about R+D for 3 years non-stop.

  11. #41
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    Quote Originally Posted by belgarion View Post
    Actually MVT ... This thread was about my fellow Kiwis. Not about who would win. I was critical of their thought processes leading into the election. I see the outcome as an indictment on Kiwis' grasp of economics and fair play. I remain extremely dissapointed.
    I agree with your thoughts here Belge. By not replying, UU confirms what I suspected about the bigger accountancy firms, it's often all about tax. No matter what policies are in place, business owners will look after themselves to a large extent, they don't need a National govt to help with that. They just know there'll be a few extra perks if National are in. But these perks may not point in a good direction for the country as a whole, and that's why we're disappointed.

    I see the Labour leadership race has awakened interest in the political process. Like a business starting out with a listing on the NZX, we'll need nothing but good stories from them for the next three years. That will be the job of the new leader. My vote would go with David Shearer.

    Note FP, I refrained from mentioning you-know-what..
    Last edited by elZorro; 08-12-2011 at 06:19 PM.

  12. #42
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    Look at the scoreboard! Look at the scoreboard!

    "Note FP, I refrained from mentioning you-know-what.. "

    You don't mean....not the....EPSOM TEA PARTY???!!!!
    Last edited by Major von Tempsky; 08-12-2011 at 06:50 PM.

  13. #43
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    Quote Originally Posted by elZorro View Post
    I agree with your thoughts here Belge. By not replying, UU confirms what I suspected about the bigger accountancy firms, it's often all about tax. No matter what policies are in place, business owners will look after themselves to a large extent, they don't need a National govt to help with that. They just know there'll be a few extra perks if National are in. But these perks may not point in a good direction for the country as a whole, and that's why we're disappointed.

    I see the Labour leadership race has awakened interest in the political process. Like a business starting out with a listing on the NZX, we'll need nothing but good stories from them for the next three years. That will be the job of the new leader. My vote would go with David Shearer.

    Note FP, I refrained from mentioning you-know-what..
    David Shearer will do a lot less harm to Labour than Cunliffe, who is widely disliked by the public, but that's all that can be said for Shearer. Good bloke but no fire.

  14. #44
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    Quote Originally Posted by belgarion View Post
    Should be perfect then! Just like Key.
    Key's got plenty of get up and go. That's why he spends all day doing stuff he doesn't have to.

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    KEY is all Bullsh*t & no substance
    Possum The Cat

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