Category Archives: R&D Funding

My 2016 R&D Resolution: Plan My SR&ED Claim Early!

There are significant advantages to planning your Scientific Research and Experimental Development (SR&ED) claim in advance. Did you know that by submitting your claim within the first six months of your fiscal year end, your claim will processed and returned by the CRA within one hundred and twenty days?

Less waiting means improved cash flow for your business, so make it your New Year’s resolution to plan your SR&ED claim early!

Getting started

Start the planning process with your SR&ED consultant and let him know that you want to plan out your claim from start to finish. Be sure to review your current time tracking and documentation methods. Specific tools can be used to streamline this process and make gathering the necessary information at the end much easier.

Also, you want to ensure that your tracking methods meet the CRA’s strict documentation standards. The goal is to allow your team to focus on their business and giving you the peace of mind of knowing that your documentation will support your claim.

Why choose Enhanced Capital Recovery for your SR&ED planning?

Highly qualified and experienced SR&ED consultants can help you plan and then stay on track to ensure that your next claim is maximized and seamless. Since 1994 Enhanced Capital Recovery’s team has been providing leading-edge technical and financial services to companies seeking to maximize their R&D incentives and tax recovery. With offices in BC, Alberta and Ontario, we offer a professional, end-to-end, risk free approach which explores all possibilities to maximize your R&D tax credits, especially SR&ED.

Industry expertise

Our team of professional consultants have specific industry expertise in engineering, healthcare, manufacturing, software, construction and oil & gas industries and have advanced levels of education in business and engineering. Given our extensive experience and training in SR&ED claims, our team routinely recognizes non-intuitive and often unclaimed qualifying work which can substantially increase the amount of tax credits you receive.

Strategic partnerships

We recognize the value of strategic relationships in order to better serve our SR&ED clients. Therefore we’ve developed strong relationships with the CRA audit teams, alliances with key technology, agricultural and environmental stakeholders and we consult regularly with an advisory board of senior executives in industry leading companies.

Proven track record

Enhanced Capital Recovery’s reputation, knowledge and successful track record are widely recognized by our clients and the Canada Revenue Agency. As such, Enhanced Capital Recovery is quickly becoming one of Canada’s most trusted independent SR&ED consulting firms.

Risk free SR&ED services.

If you are creating new products, improving existing technology, advancing an industry process, or developing a technically challenging innovation, your company may be eligible to receive an SR&ED tax credit refund. Yet becoming familiar with the entire SR&ED claims process and filing the necessary paperwork can be a huge drain on resources. That is time and money wasted if the claim is rejected.

With our contingency based fees, we completely eliminate the risk of making a claim. We do the work up front and only get paid when your refund is secured.

Put the proven expertise of Enhanced Capital Recovery’s team to work to save you time and money to get the maximum refund you are entitled to. Contact us today for a no risk, free consultation!

R&D Tax Credits: Checklist for Software Developers

Software developers employ more than 300,000 Canadians in an industry that contributes nearly $30 billion to domestic growth, and the Canadian Revenue Agency (CRA) is rewarding these companies with increased SR&ED funding.

Many Canadian software development companies already qualify for a R&D tax credits through their routine business activities. Enhanced Capital Recovery can determine how much funding your business is eligible for and our professional consultants can take care of the complicated claim procedure for you.

Software projects that qualify

The SR&ED program accepts a variety of software development projects, ranging from improving your company’s employee scheduling program to developing a smart phone app—as long as the basic research and development criteria are met.

More important than your project’s success is the knowledge your company gained about the technology. Being able to express what your employees discovered in an area they didn’t initially understand is vital to a successful claim.

Checklist of activities related to software development that qualify for SR&ED tax credits?

If your company is currently involved in any of the following activities, it is likely that you would qualify for SR&ED:

Advanced technology in operating systems, programming languages, data management, communications software and software development tools.
Conducted research into methods of designing, developing, deploying, or maintaining software.
Produced advances in generic approaches for capturing, transmitting, storing, retrieving, manipulating, or displaying information.
Filled a technology gap in order to develop a software program or system.
Conducted research and development into software tools or technologies in specialized areas of computing (i.e. image processing, geographic data representation, character recognition, artificial intelligence).
Attempted to improve the performance, speed or functionality of our application.
Encountered unexpected technical uncertainties during our development efforts (i.e. hardware / software incompatibilities).

Claimable expenses

Essential materials used in the project can be claimed, including hardware used for testing new software, or equipment used for data collection, analysis, or research undertaken during development.

Salaries of employees is one of the major areas of most SR&ED claims. A portion of staff salaries directly involved with the SR&ED project can be recovered. The amount depends on the percentage of time the employee devoted to the project—developers that spent 60% of their time on the project could claim a significant portion this time.

Note that routine or non-technical tasks, such as marketing, advertising, customer support, or day-to-day business tasks cannot be recovered on your SR&ED claim.

Taking the next step with Enhanced Capital Recovery

The ECR tax consultant you work with is not only knowledgeable in SR&ED standards, but is an expert in the software development industry as well. The CRA expects your claim to be submitted using industry-specific terminology—something most in-house accountants have difficulty accomplishing.

Let Enhanced Capital Recovery assist you in discovering how much of your expenses can be recovered through the SR&ED program. To speak with an industry-expert consultant, contact us for a no-risk assessment today.

SR&ED Checklist for Agribusiness & Food Processing

Is your company experimenting with improving products, developing new products, packaging or processes and wondering if this work might be eligible for R&D funding? It’s a great question to ask as it is estimated that less than 50% of Agriculture and Food Processing companies are claiming the research and development funding they are eligible for.

The reason so many companies are missing opportunities is that they don’t understand the broad definition of research and development by the Canadian government. In this article we’ll provide you with several examples of R&D funding and an overall SR&ED checklist that can help you identify potential opportunities that you might be neglecting.

It’s interesting to note that many of the examples of eligible R&D funding in agriculture and food processing are projects that most companies consider part of their routine business. For these companies, once they begin to capitalize on this funding source, it could mean ongoing R&D funding to support future R&D, not to mention adding to their company’s competitiveness and bottom line.

Agriculture

As populations increase, farmers are advancing agriculture techniques. Changes in farming techniques that increase crop yield or alter equipment to increase production and safety are often eligible for R&D funding.

Other examples of R&D eligible activities that are common include attempts to make your farm more environmentally-friendly. For example, developing alternatives to harmful chemicals, using equipment that requires less energy, or improving irrigation techniques and routines for reduced water use.

Finding a practical use for traditional waste (manure, groundwater, or leftover livestock feed) can receive funding, such as altering equipment to be powered by unused grains or corn.

Food Processing

Food processing companies may be involved in a variety of eligible activities including, developing an existing product to meet consumer needs of gluten-free, sugarless, and nut-free foods.

Experimenting with ingredients to extend a product’s shelf-life or to improve flavour and nutrition or conducting research on the impact of a process, such as your storage or shipping techniques are included in some R&D programs as well.

Vineyards and Breweries

In trying to create the next must-have wine, there’s a good chance you altered your usual process. Experimenting with soil types, grape selection, and water control are everyday activities that qualify for tax credits.

Funding is also available for breweries. Examples of eligible projects include changing the bottling process for better efficiency, experimenting with hops to improve flavour, or developing new packaging to reduce materials.

Plants and Greenhouses

Everyday greenhouse operations could also lead to your business receiving funding. Modifying seed combinations, experimenting with temperatures, and determining how to better grow plants that are non-native to your area are examples that may qualify.

Various types of research may also be eligible, such as examining how different temperatures, lighting, and irrigation routines impact growth.

R&D Funding Checklist for Agricultural and Food Processing Companies

The following is a checklist of common activities that may be eligible for R&D funding.
Modifying processes to improve labour efficiency
Developing new products or packaging
Attempting to make products more consistent
Conducting experiments to reduce the impact of crop diseases
Extending the shelf life of products
Developing a healthier product
Developing custom equipment
Developing new crop varietals where there is uncertainty of success in the given growing conditions
Reducing the environmental impact of activities
Experimenting with organic/biological processes
Experimenting with unique combinations of chemicals to improve crop production
Developing more efficient material handling processes

Next steps

If you think your agriculture or food processing company might be conducting some of the above activities, we invite you to contact us for a free consultation to learn how to capitalize on this opportunity.

R&D Tax Credit Examples in Engineering & Construction

R&D tax credits, such as SR&ED in Canada, are not limited to scientists conducting experiments in laboratories. Although in order to qualify for R&D tax credits the R&D work must meet certain standards that show application of the scientific method, the definition is broad enough to encompass a wide variety of industries and activities, including in the fields of Engineering and Construction.

The reality is that Engineering and Construction firms are often paying for and taking the financial risks associated with engineering work focused on development. In our examples, the companies at first assumed that they would not be eligible for R&D tax credits. This, however, was not the case.

Specific examples

In our examples, the engineering company was providing their services to one of their clients who was hired to complete an underwater tunnel. The engineering firm thought that only their client could claim for SR&ED because of the fixed fee contract agreement between the two companies.

The construction company thought that they could not claim SR&ED because the tunnel was the property of the city that hired them to build the tunnel. After reviewing the agreements between all three of these parties, it was determined the intellectual property rights belonged to the engineering firm and/or the construction company and not to the city that hired them.

Both companies were able to successfully claim SR&ED for their employee’s salaries who were involved in the R&D, engineering for their prototyping costs, cost overruns versus the flat fee contract, and the cost of materials consumed or transformed.

In total these two companies received $230,000 in SR&ED funding. Both these companies also realized that they could claim SR&ED every year, for new and ongoing projects, as long as their contracts were worded with a SR&ED clause.

General examples

In general SR&ED eligible projects in Engineering and Construction may include:

development or improvement of construction and building materials
structural designs related to dynamic structures, for example, retractable roofs, solar energy systems
development of construction equipment, tools and temporary construction structures
development or improvement of construction techniques – such as in soil remediation or to achieve environmental certification under programs such as LEED

Who is eligible for SR&ED funding?

Almost any Canadian company can be eligible to apply for Scientific Research and Experimental Development (SRED). Here are the details of the criteria from a company perspective:

Your R&D took place within Canada
You have proof of expenditures related to the claimed projects, for example T4s, and/or invoices
You have ownership of the Intellectual Property resulting from the project
You are in good standing with government financial reporting
Your project expenses were incurred within 18 months of the fiscal year-end as of filing

Why Choose Enhanced Capital Recovery?

All too many companies across Canada are satisfying the requirements of funding programs without realizing they may be eligible to recover up to 65% of their expenses.

Our team has brought success to various companies, including those whose claims were initially turned away by the Canadian Revenue Agency. To find out how your innovative engineering or construction activities could result in funding, contact Enhanced Capital Recovery today for a no-risk consultation.

Does Your New Product Have SR&ED Eligibility?

The Scientific Research and Experimental Development (SR&ED) tax credit is a great source of R&D funding for companies in Canada. However, what is considered “innovation” according to the Canada Revenue Agency is often misunderstood. This misunderstanding can be very costly for companies, as attempting to claim projects that are not eligible can cause them to give up on subsequent projects that are eligible.

The Canada Revenue Agency is clear in its SR&ED eligibility requirements that a new product is not necessarily considered SR&ED. In fact SR&ED is not fundamentally about new products. It is fundamentally about achieving technological advancement. To quote the CRA: “novelty, innovation, uniqueness, feature enhancement, or increased functionality alone does not represent or establish technological advancement.”

If technological advancement is key to claiming SR&ED, what does it look like?

New products which require technological advancement to create them would hit the mark and meet the CRA’s SR&ED requirements. This means that when a new or improved material, device, product, or process is created, it must demonstrate technological advancement.

To prove this, “the advances in technology that are being sought should be distinguishable from the benefits of the new or improved material, device, product, or process.” The CRA will look for, “technological advancement (that) moves the technology base or level of a company to a higher level through an increase in the understanding of technology”.

In other words, a SR&ED project is one that adds technological knowledge to the organization – in the form of principles, techniques or concepts which were previously unattainable.

So the factors that companies often mistake for “innovation” in regard to the SR&ED interpretation of it, are not guiding principles. Even the success or failure of the work is not relevant to its eligibility for SR&ED. For SR&ED innovation, technological advancement is the true litmus test.

A new product SR&ED example

In its draft document providing guiding examples of SR&ED, the CRA gave the following example, paraphrased here, of a how a new product may or may not be eligible for SR&ED.

The example takes the case of a company which makes a carrot peeler with a glow-in-the-dark handle, which is a new product, but doesn’t challenge any technological uncertainty. When the company redesigns the handle, however, to improve ease of use, it has to experiment with manufacturing processes using new plastics. The experimentation with new materials and manufacturing processes to create the desired outcome proves to qualify as technological advancement and hence qualifies as SR&ED.

About Enhanced Capital Recovery

Enhanced Capital Recovery is an industry leading SR&ED consulting firm. Our goal is to assist companies to truly understand what SR&ED is, what areas in your organization may be eligible under the program, and then assist you through the entire process.

Please contact us for a free, no obligation consultation today!

R&D Tax Credits in Life Sciences & Biotech

When a new product or industry breakthrough occurs, it is clear that innovation has occurred. However, when it comes to R&D tax credits in Canada, such as SR&ED, the definition of innovation is much broader – inclusive of incremental advancements. These are often overlooked.

The question is, “Is your company one of many who are missing the opportunity claim R&D tax credits?”

Find out which R&D tax credits in life sciences & biotech are available. We’ll show you what type of companies can claim SR&ED, as well as some examples of projects that would qualify.

Maximizing your companies’ SR&ED tax credits is best supported by an expert in the field. SR&ED consultants help companies maximize their R&D tax credits and ensure that projects are submitted according to the CRA’s guidelines.

Who is already claiming SR&ED?

In the field of Life Sciences and Biotechnology R&D tax credits are available to a range of companies, including contractors such as analytical laboratories, contract research laboratories or contract manufacturing organizations. Examples of types of companies already claiming include:

Biotechnology – Biological Product Manufacturers
Pharmaceutical – Pharmaceutical and Medicine Manufacturers
Nutraceutical – Producers of isolated nutrients, dietary supplements and herbal products
Medical Equipment and Supplies Manufacturers
Electro medical and Electrotherapeutic Apparatus Manufacturers
Biotechnology & Life Sciences R&D Facilities

Project examples that are SR&ED eligible

Has your company conducted pre-clinical or clinical studies, devised new analytical methods or instruments in the process of conducting business? Much of this activity, which is often perceived by organizations as routine work, could be SR&ED eligible.

Here are some basic projects from previous SR&ED claims that are typical examples of SR&ED eligible projects in Life Sciences and Biotechnology industries:

Creating new or enhanced manufacturing processes
Developing or enhancing existing tools or devices
Developing a new or improved cultivation of plants
Conducting breeding programs which modify organisms
Developing computer programs
Developing green technologies
Advancing bioinformatics from living organisms

How we can help

Our experienced SR&ED experts at Enhanced Capital Recover will be able to identify all of your eligible projects and assist you in recovering SR&ED tax credits to which you are entitled.

Even if you currently complete your own R&D tax credits application, our experts will be able to validate and optimize your scientific descriptions as well as your eligible expenses. We will assist you in maximizing your return on investment while minimizing the risk of audit by Revenue Canada.

With our contingency based fees, we completely eliminate the risk of making a claim. We do the work up front and only get paid when your refund is secured. Contact us today for a free, no obligation consultation.

Why Wait for a Tax Credit | Get SR&ED Financing

Are you waiting for your SR&ED refund so you can reinvest the cash into further innovative projects or hire new people?

SR&ED tax credits are an amazing tool for funding your R&D projects, but there can be a significant delay between the time of your expenditures and receiving the tax credit. If your company is eligible for SR&ED and would benefit by receiving the funding sooner, there are financing programs available to bridge this time gap.

Maintain your company’s cash flow

These programs, called Tax Credit Financing, are designed to bridge the time gap between applying for Federal or Provincial tax credits and receiving the funds.

The amount you borrow is based on your R&D or other tax credit‑related expenses in a given fiscal year, up to $250,000.

Flexible repayment options

Depending on the financing program, several options can be available for repayment. When you receive your refund, you can choose to reduce your debt or it can be converted into a 36-month term loan and use your money for other business needs, such as funding growth projects, buying equipment or stepping up your marketing efforts.

Typical benefits and features of financing SR&ED claim:

No capital payments while you wait for your refund
No penalty for paying off your loan in part or in full at any time

Not sure if you have eligible research and development tax credits?

Enhanced Capital Recovery is here to help you determine if your company is eligible for tax credits or any other R&D funding sources available. We will provide a free consultation to do this – in fact you never pay for our consulting service unless we provide results.

Our goal is to assist companies such as yours to truly understand what SR&ED is, what areas in your organization may be eligible under the program, and then assist you through the entire process.

We’re experts in the field of R&D funding in Canada – let us take care of the details while you focus on your business.

Contact us today for a no-cost consultation

Are you launching a tech startup?

There’s never been a better time to launch a tech startup company in BC. Only a decade ago, a tech company would have to search far and wide to find the supports it needed to get off the ground. Now there are 25 accelerators in BC alone.

If you are launching a tech startup, you need all the help you can get. This article aims to inform you what you need to know about accelerators, as well as other R&D funding opportunities that you should not overlook.

How can an accelerator help you?

Accelerators, also known as incubators, typically offer low-cost office space, access to tools and equipment, as well as proximity to other start-up leaders. In addition, some will invest in start-up companies or provide mentorship networks and organize funding events to draw investor interest. A good example of this is the Cascadia Summit, an event organized by the Launch Academy incubator in Vancouver.

Are accelerators effective?

The jury is still out on the effectiveness of start-up accelerators. However, if you read tech news you will notice a trend of articles about tech companies whose successful launch included a beginning at an accelerator. Companies cite a number of advantages to working at accelerators, including a quicker path to understanding the causes of business pitfalls through good coaching and advice, as well as help identifying the most appropriate target markets.

The other side of the story is that it’s hard to define what success looks like for an accelerator program. The fact remains that a large percentage of tech start-ups fail. A Start-up Genome report by Stanford University and University of California Berkeley which analyzed 3,200 early stage tech companies found that over 90% ended in failure. The causes? Rather than competition, failure was mostly due to internal problems like premature scaling, or hiring too many people too soon, as well as focusing on acquiring users before the product has been through enough testing.

What are the top funded accelerators?

Recently a couple of accelerators topped the lists of Federal funding recipients with the mandate to match the funding on a one to one basis: The BC Technology Industry Association (BCTIA), which received $10.4 million and Wavefront Wireless Commercialization Centre Society, which received $9.5 million.

How many accelerators are there in BC?

There are a number of other accelerators in BC including the following:

Accelerate Okanagan
Accelerate Tectoria, VIATeC
Centre4Growth, BCTIA
Discovery Parks
entrepreneurship@UBC
entrepreneurship@UVic
Foresight Cleantech Accelerator
GreenTech Exchange, SFU
Highline
Innovation Central Society
Innovation Island
Institute B
Invoke Labs
Kamloops Innovation Centre
Kootenay Association for Science & Technology
Kootenay Rockies Innovation Council
Launch Academy
New Ventures BC
SFU TIME Ventures
Spring Activator
Vancouver Island Technology Park
VentureLabs
Victoria Square Labs
Zen Launchpad

R&D funding to support your venture

It’s important for tech start-ups to realize that in addition to investor funding, there are also a number of research and development funding programs to support a startup’s growth.

Enhanced Capital Recovery (ECR) is dedicated to helping companies discover the full potential of innovation funding and R&D incentives available. To best support start-ups financially, ECR only charges fees based on results, never before.

If you are new to the innovation game and foresee spending resources in this area, let us help you setup in the right way to take advantage of all of the opportunities.

Contact us today for a free, no-obligation consultation to explore all of the possible funding alternatives that may be available for your company.

How R&D Funding Works in Canada

According to recent research, over 58% of companies in Canada have not followed up on the opportunity to claim a part of the $3 billion in R&D funding offered by the Federal Government of Canada each year.

This missed opportunity can happen for several reasons. Company leaders who assume that R&D funding programs are restricted to technology companies, companies performing laboratory research, or large companies with massive research budgets, are just a few reasons for overlooking these amazing opportunities to fund further innovation or improve the company’s bottom line.

Which industries are benefiting?

The fact is that most companies complete activities during the course of business that may be eligible for R&D funding, such as SR&ED. In general, if some of your staff are engaged in overcoming technological problems for which a solution is not readily available, there is a good chance that the work they are doing is fully or partially eligible for SR&ED.

Over all, the companies who receive funding span a wide range of industries including, but not limited to: manufacturing, agri-business, food manufacturing, oil and gas service companies – and of course start-ups and tech companies.

Who is Eligible for R&D funding?

Almost any Canadian company can be eligible to apply for Scientific Research and Experimental Development (SRED). The CRA outlines three requirements your business must complete to earn SR&ED credits:

You attempted to overcome a technological uncertainty
You used systematic research and development to solve the problem
You aimed to advance a science or technology in the process

Furthermore:

Your Research & Development took place within Canada
You have proof of expenditures related to the claimed projects, for example T4s, and/or invoices
You have ownership of the Intellectual Property resulting from the project
You are in good standing with government financial reporting
Your project expenses were incurred within 18 months of the fiscal year-end as of filing

How much R&D funding is possible?

The amount of funding depends on the amount you spent of eligible projects conducted in Canada. Since salaries are a big part of the claim, entrepreneurs who do not pay themselves a salary can be diminishing the size of their claim.

Enhanced Capital Recovery can help you set up your company for success by showing you how to structure your company and document your projects to maximize success. Outsourcing work overseas can also diminish the size of your funding opportunities, since eligible expenses must occur in Canada.

What expenses can be claimed?

A large portion of salaries of all employees and a portion of the shareholder’s salaries engaged in the projects, contractor fees as well as cost of all materials used or consumed in the course of the research work may be recoverable under one of the funding programs.

Companies may also claim cost of any prototype equipment or facilities developed for undertaking the project. The SR&ED program, for example, allows a claim of up to 65% of the salaries and expenses related to the project.

About Us

Enhanced Capital Recovery’s goal is to assist companies such as yours to truly understand all R&D funding options available, what areas in your organization may be eligible, and to assist you through the entire process.