We’ve met with many leaders in organizations who are currently filing a successful SR&ED claim. With several years of successful claims under their belt, the organizations are proud they are capitalizing on SR&ED and are quite confident that they understand the rules of SR&ED.
If this describes your organization, take a moment to ask yourself the following critical questions:
- Do you understand the CRA SR&ED claim review process and would you be prepared for an audit?
- Are you using your time wisely in documenting potential SRED claims or wasting resources by over documenting or documenting areas that are not eligible?
- How do you know you are filing and receiving the best possible return?
The CRA SRED claims review process
Due to the volume of SRED claims received each year, the CRA does not manually review each claim. Therefore, even if your claim was accepted, it doesn’t mean that it was done correctly. Claims can be accepted without review based on your past claim history, consistency of claim amounts or chance.
This can be very disturbing for an organization as an audit could leave your company shocked by the discrepancy of your claim from SRED requirements.
Using resources wisely to document SRED
Although the information is available for you to document your own SRED claim, the SR&ED claim process is complex and requires a deep understanding CRA rules and how they are practically applied.
Inexperienced SRED claimants often overdo record keeping and notes. Although proper documentation is required, it is also very specific. Too much documentation of the wrong information is a poor way to spend valuable time and resources. If your team is bogged down in documentation processes and report writing for weeks and months at a time to a level of resource effort that can be close to the value of the investment tax credits being recovered.
Also common is organizations who document projects that turn out to be ineligible for SRED. Being clear what projects or parts of projects are eligible for SRED at the outset is critical to not wasting resources which could counterbalance any returns gained.
Make your SRED claim without the risk of missing the mark
With time and accumulated experience, SR&ED advisors develop a full understanding of the claim process and the documentation necessary to support and successfully defend a claim in the event of a CRA audit.
An experienced consultant can also identify areas where expenditures were neglected, guidelines were misinterpreted or calculations were below the allowable limits set out by the CRA.
On the other hand, a SRED claimant with little filing experience does not have the same level of experience and expertise in identifying the optimal level of recovery. This is particularly true for claimants who have never experienced a CRA audit.
In many cases, a consultant’s review may not lead to enough value to be worth the additional effort, but nothing is lost in trying. In our experiences, the majority of our reviews lead to significant differences – with some claim sizes exceeded by more than tenfold.
Get a free review of your SRED claim
Enhanced Capital Recovery offers a complimentary claim and project review service. We can offer insight into issues or indicators that would make your claim a high risk for audit. At the very least, you will be able to confirm the accuracy of your current claiming process and rest assured that you are receiving the best possible return for your company. Contact us today!