Tag Archives: R&D funding

Research and Development Funding FAQ

You have probably heard of the Scientific Research & Experimental Development (SR&ED) program, but you may have some questions. What is research and development, exactly? What kinds of activities apply? Why is the government funding these projects?

There is a good chance that a task your employees have performed in the recent past, or carry out on a daily basis, qualifies for SR&ED funding. Here are the answers to common questions about the program, and how your business may be eligible to recover expenses today.

What is research and development?

The Canadian Revenue Agency (CRA) rewards businesses of all sizes and in all industries for conducting research and experiments with the goal of advancing technology. From the outset, the project must be undertaken to overcome a technical obstacle with an element of uncertainty in the outcome.

Whether or not your experiments were successful does not matter—the CRA bases its funding on the attempt alone—so long as they were conducted systematically and there was an element of uncertainty in the outcome.

The CRA will expect your business to have a technical uncertainty in mind before conducting the R&D, and you must be able to prove this “technical content.” For this reason it is very important to be aware of what needs to be documented and seek an experienced SR&ED consultant.

What types of projects qualify?

For many businesses, eligible projects are often a form of experimental development. An owner of a sporting goods shop who improved a point-of-sale system to track online sales, or a commercial fishery that developed a better canning process could both qualify.

Eligible scientific research doesn’t need to involve microscopes and lab coats (though that certainly counts). Researching your farm’s water use to develop a more efficient irrigation process, for example, could be a qualifying activity.

Why is the CRA rewarding R&D?

The federal government has long since been rewarding research and development by Canadian companies. Beginning as a traditional tax credit program in the 1940s, interest in technological advancement on Parliament Hill has since adapted into the SR&ED program.

The Canadian government strongly feels that domestic research and development keeps Canada competitive in the global marketplace. The SR&ED program is therefore an investment: funding Canadian-owned companies to advance technology for a strong economy.

I think my company is eligible—what do I do now?

The SR&ED application process is becoming stricter each year and since SR&ED is about technical innovation and new knowledge, it is advantageous to engage a specialist who can understand your technical obstacles as well as what CRA requires for a successful SR&ED claim.

If you think your business could qualify for SR&ED funding, contact Enhanced Capital Recovery today for a free consultation to confirm you qualify and perhaps to see how much of your expenses can be recovered. Call Enhanced Capital Recovery at 1-800-470-0235, visit us online at www.enhancedcapitalrecovery.com or email us at info@enhancedcapitalrecovery.com.

At ECR, a SRED firm in Edmonton, Vancouver and Toronto, you will work with an industry-expert consultant who knows how to maximize your claim in your specific field. We look forward to hearing from you!

Looking to Expand Your R&D?

The Scientific Research and Experimental Development (SRED) tax credit could be your solution!

Through the SR&ED program, companies are able to recover up to 68 percent of eligible costs and activities. Expenses like employees’ and shareholders’ salaries, contractor fees, and materials used in the qualifying project may be covered by the program.

Think your company is too small for SR&ED?

You do not need to operate a Fortune-500 business in order to qualify for SR&ED funding. In fact, the program is intended to reward small and medium-sized companies across Canada, especially newly-established start-ups.

Three quarters of applications received by the CRA are from smaller businesses. However, the SR&ED program also accepts claims from larger corporations, unlike other federal tax incentives that only support start-ups.

Isn’t the funding only available to companies conducting innovative research and groundbreaking experiments?

Don’t sell yourself—and your business—short! There is a good chance that an activity you conduct on a daily basis is enough to qualify for SR&ED tax credits.

This is often an experimental project, like developing a new product, improving an old one, or increasing the efficiency of a routine process. Research projects could include determining the impact on an everyday procedure or investigating a solution to a technical obstacle.

How can a SRED Consultant help?

As SRED consultants we are experts in helping you identify and successfully claim the SRED tax credit. Best yet, we do all the work with no risk to you. We only charge a fee based on the SRED return we get for you!

Watch our videos:

https://www.youtube.com/user/EnhancedCapital

or visit our website for more information:

www.enhancedcapitalrecovery.com

Or contact us today for a no risk, no obligation 15 minute discovery consultation to see if your company qualifies for SR&ED. Enhanced Capital Recovery is your complete SR&ED solution in Edmonton, Vancouver and Toronto.

Tel: 1-800-470-0235

info@enhancedcapitalrecovery.com

R&D Funding for the Oil and Gas Industry

Canada’s oil and gas industry is a backbone of the country’s economy and the federal government is rewarding these companies with R&D tax incentive, such as SR&ED tax credits. However, businesses often shy away from applying due to misconceptions about the program.

The Canada Revenue Agency (CRA) excludes any oil and gas prospecting, exploring, drilling, and production operations from funding—but there are plenty of other related activities that could allow your business to recover up to 65% of eligible expenses.

To qualify, your company needs to have surmounted a technical uncertainty using scientific research or experimental development. Here are examples of what activities can and cannot qualify for funding and what you can do to capitalize on SR&ED tax credits.

What types of work are eligible?

While direct oil and gas operations are excluded from the SR&ED program, there are many opportunities to apply for funding. Creating or improving technology to advance a process, such as new software for more efficient automated engineering, is a common project in the industry.

The manufacturing sector also offers opportunities. Experimenting to improve hydraulic systems, A-frames, rubber components, or equipment that reduces environmental harm may be accepted.

Keep in mind other areas that are not directly related to the oil and gas industry, but could be an eligible everyday activity. For example, perhaps you improved your transportation or storage equipment to overcome a technical setback.

What projects do not qualify?

As mentioned, the CRA states that “prospecting, exploring or drilling for, or producing, minerals, petroleum or natural gas” do not qualify for SR&ED funding. Other activities like routine testing or data collection, market research, or advertising are also excluded.

How should I prepare for a claim?

Before beginning any projects that may qualify for SR&ED funding, it is important to document the entire process. The CRA will request all details about the research or development your company conducted, whether the projects were deemed successful or not.

The review team will also require information about which employees worked on the project, what tasks they performed, and what amount of their time spent working was allotted to the project.

How can Enhanced Capital Recovery help?

Hiring a professional SR&ED consulting firm like Enhanced Capital Recovery is especially worthwhile for oil and gas claims. These businesses often partner with outside companies and foreign joint ventures, making the SR&ED application a complicated process.

We are not only specialized in SR&ED procedures, but we are oil and gas experts as well. You will work with a highly skilled consultant who is familiar with the industry language the CRA expects.

To schedule a no-obligation discovery assessment, contact Enhanced Capital Recovery today and learn how much of your expenses could be recovered through the SR&ED program.