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Funding questions Australian founders ask too late.
Short answers to common questions about R&D tax, grants, evidence and funding readiness in Australia.
Australian founders often discover funding options only when they are already under pressure — at tax time, before a raise, or when cash gets tight.
Canopy is building tools to help companies understand their options earlier, organise the right evidence as they build, and avoid the last-minute scramble.
This guide is general information only. It is not tax, legal or financial advice.
01
R&D Tax Incentive basics
What is the R&D Tax Incentive in Australia?
The R&D Tax Incentive is an Australian Government programme that helps eligible companies offset some of the cost of eligible research and development activities. For startups and growing companies, it can be an important source of non-dilutive funding.
Who can claim the R&D Tax Incentive?
The programme is generally for companies conducting eligible R&D activities. Eligibility depends on the company, the activities being undertaken, the expenditure incurred, and the records kept. Sole traders and trusts generally cannot claim directly unless the claim is made through an eligible company structure.
How much R&D spending do you need to claim?
In most cases, a company needs at least $20,000 of eligible R&D expenditure in an income year to access the R&D Tax Incentive. There are some exceptions, such as work conducted through a registered Research Service Provider.
When is the R&D Tax Incentive deadline?
Companies generally need to register their R&D activities within 10 months after the end of their income year. For many companies with a 30 June year end, this usually means the registration deadline falls on 30 April the following year.
Can software development qualify for the R&D Tax Incentive?
Software development may qualify when it involves genuine technical uncertainty, experimentation, and the creation of new knowledge. Routine development, standard implementation, or ordinary use of existing tools is less likely to qualify on its own.
Does building an MVP count as R&D?
Sometimes. Building an MVP is not automatically R&D. The important question is whether the work involved systematic experimentation to resolve technical uncertainty — not simply whether the product was new to the business or market.
Can AI or machine learning work qualify for R&D?
AI and machine learning work may qualify where the company is testing technical hypotheses, experimenting with different approaches, and resolving uncertainty that could not be answered through standard practice. The evidence should show what was tested, what failed, what changed, and what was learned.
Do you need revenue to claim the R&D Tax Incentive?
Revenue is not always required. Many early-stage companies claim while they are still pre-revenue. What matters more is whether the company is eligible, whether the activities qualify, whether eligible expenditure has been incurred, and whether the claim is properly supported.
02
Evidence and funding readiness
What evidence do you need for an R&D Tax Incentive claim?
Useful evidence can include experiment plans, technical notes, test results, sprint records, Jira tickets, GitHub commits, design documents, architecture decisions, timesheets, invoices, and records showing how costs relate to R&D activities.
Why is R&D evidence so important?
The R&D Tax Incentive is a self-assessment programme, which means companies need to be able to support what they claimed if reviewed later. Good records help show what work was done, why it was uncertain, how experiments were run, and how expenditure was connected to the R&D activities.
When should a company start collecting R&D evidence?
Ideally, evidence should be collected while the work is happening. Waiting until the end of the year often means teams have to reconstruct decisions, experiments and costs from scattered tools, memory, and old files.
What is the biggest mistake companies make with R&D evidence?
One common mistake is treating R&D as a once-a-year tax exercise instead of an ongoing evidence and funding readiness process. By the time the claim is due, key context may be missing or difficult to prove.
Do Jira, GitHub, Slack or Notion records help with R&D evidence?
They can. Many companies already create useful evidence in the tools they use every day. The challenge is connecting those records to the right projects, experiments, decisions and costs in a way that is clear and defensible.
How long do R&D records need to be kept?
Companies should keep R&D records for several years after making a claim. The exact requirements can depend on the programme and tax rules, so companies should confirm this with official guidance or a registered adviser.
What does "funding readiness" mean?
Funding readiness means having the right information, records and evidence organised before you urgently need funding. For R&D claims, grants or investor conversations, it means being able to clearly show what you are building, why it matters, what work has been done, and what evidence supports it.
How does Canopy help with R&D evidence?
Canopy is being built to help companies organise their R&D evidence continuously, connect work across tools, identify gaps earlier, and reduce the end-of-year scramble. The goal is to make funding and compliance workflows easier to manage as companies build. Learn more about Canopy.
03
Grants, funding and non-dilutive capital
What is non-dilutive funding?
Non-dilutive funding is funding that does not require founders to give up equity. Examples can include grants, tax incentives, rebates, government programmes and some forms of debt or advance funding.
Is the R&D Tax Incentive non-dilutive funding?
Yes, the R&D Tax Incentive is often described as a form of non-dilutive funding because eligible companies may receive a tax offset or cash refund without selling equity.
What funding options are available for Australian startups?
Australian startups may consider a mix of R&D tax incentives, government grants, accelerators, angel investment, venture capital, revenue, debt, and strategic partnerships. The right option depends on the company's stage, sector, cash position and growth plans.
Are grants better than the R&D Tax Incentive?
Not necessarily. Grants are often competitive, specific and time-bound. The R&D Tax Incentive is broader but still requires eligibility, evidence and compliance. Many companies should think about both as part of a wider funding readiness strategy.
When should founders start thinking about grants and R&D funding?
Founders should start early, ideally before the funding pressure hits. Many funding options require evidence, clear project records, budgets, timelines and a strong explanation of the innovation being developed.
Why do companies leave funding until too late?
Funding work is often pushed aside because teams are focused on building, selling and hiring. The problem is that funding applications, R&D claims and investor materials all rely on evidence that is much easier to capture as the work happens.
What is Canopy's broader mission?
Canopy exists to remove friction between innovation and funding. We want more Australian companies to access the funding they are entitled to, spend less time on manual admin, and keep more momentum behind the work that matters.
Is Canopy replacing accountants or R&D advisers?
No. Canopy is being built to make the workflow easier, more organised and more evidence-driven. Registered advisers and tax professionals remain important for advice, review and compliance. Canopy's role is to help companies and advisers work from better organised information.
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Stop leaving funding evidence until the end of the year.
Canopy is building a simpler way for Australian companies to organise R&D evidence, track funding readiness and prepare for funding conversations earlier.
Start your claim →This content is general information only and does not constitute tax, legal or financial advice. Speak with a registered adviser before making a claim or funding decision. Programme rules, rates, thresholds and deadlines may change — always confirm current requirements with the ATO or a qualified professional.