Canada’s Scientific Research and Experimental Development (SR&ED) program provides over $4 billion in tax credits to thousands of companies each year. Small businesses reap the benefits most with over 75% of funding going their way, and the program is constantly making Canadian companies competitive on the global market.
While the SR&ED program is extremely beneficial, it requires in-depth knowledge of current incentives and a familiarity of how to best prepare your claim for maximized funding.
Become an expert in SR&ED—or acquire external assistance
In order to first maximize your funding, someone in your company must be knowledgeable of the SR&ED program. Understanding which incentives the business qualifies for requires both time commitment and knowledge of the Canadian Revenue Agency’s (CRA) criteria.
If you company possess a small staff, or you want employees’ energy directed towards their projects, consider allowing an expert SR&ED consultant to manage your claim. SR&ED experts, like Enhanced Captial Recovery, can not only help you make a claim, but in most cases significantly improve the amount of your claim. View our Youtube Channel for more information on how SR&ED works.
Keep up-to-date with Program changes
The SR&ED incentive criteria are constantly changing as new policies and requirements are introduced. Keeping informed with these changes is essential to maximizing your claim, and can best be followed by regular review of the CRA’s information bulletin.
However, the key points of these changes are often amidst extensive documents and are not simple to uncover. For example, a federal government budget report last October revealed changes to which expenditures are covered under the program.
Be aware of necessity to satisfy “technical merit”
An important step towards securing a tax credit is to understand that the program delivers incentives based on “technical merit”—gaining SR&ED funding is not a simple accounting exercise, and the process goes beyond discovering your initial eligibility of the program.
To qualify for an incentive, your business must demonstrate an occasion where it overcame technical uncertainty, or contributed to advancing an industry technology.
This could be making changes to a process to improve productivity or reacting to an unexpected obstacle with innovative expertise. Regardless of the experiment’s success, these attempts and processes need to be demonstrated in order to qualify for funding.
Document all research and development ventures
Satisfying SR&ED criteria is your company’s first requirement in applying for an incentive, but the ability to prove your contributions in the industry are equally as important. The CRA will likely consult with industry experts when reviewing your claim, making demonstration of your technological advancements and gained knowledge vital.
Keep track of any product trials, experiments to remedy unanticipated results, and documents explaining industry research, as these will be required when submitting your claim. Make sure to file all paperwork demonstrating company growth and job creation, as well.
Meeting with key employees often to capture these improvements is a good idea, and making a routine of discussing and documenting your expanding industry knowledge will ease the application process.
ECR works with companies of any size, and many companies eligible for SR&ED are small businesses. With SR&ED consulting offices in Vancouver, Edmonton and Toronto, our team has brought success to many companies, including those whose claims were initially rejected by the Canadian Revenue Agency. Your company will work with a consultant knowledgeable in the industry to recover the most funding, with the least amount of risk possible.
For a no-obligation consultation, submit a contact form and our team will arrange a free assessment of your SR&ED case.