Tag Archives: SR&ED program

How to Get the Most Out of Your SR&ED Claim

Businesses in Canada have long been taking advantage of the benefits of the Scientific Researchmaximizng sr&ed edmonton vancouver toronto and Experimental Development (SR&ED) program.   With up to 60% of funding provided for innovative research and development in commercial applications, SR&ED claims have assisted many Canadian companies in funding their R&D projects and remaining competitive in the global market.

While the SR&ED program is extremely beneficial, if not done properly, it could lead to review and rejection by the Canadian Revenue Agency (CRA).  In fact, SR&ED claims require in-depth knowledge of current incentives and a familiarity of how to best prepare your claim for maximized funding.

SR&ED claims require specialized knowledge

In order to first maximize your funding, the person preparing the claim must understand the intricacies of SR&ED and other R&D incentive programs. Understanding which incentives the business qualifies for requires both time commitment and knowledge of the Canadian Revenue Agency’s criteria.

For organizations with a small, specialized staff, the majority of their energy is directed towards working on their projects.  In these circumstances, it makes sense to consider hiring an expert SR&ED consultant to manage the claim.  SR&ED consultants, like Enhanced Capital Recovery, can manage the claim end-to-end and in most cases greatly improve the amount of your claim.

The SR&ED program is changing rapidly

SR&ED program policy is rapidly evolving due to the goals of the program and politics. Keeping informed of policy changes is essential to maximizing your claim and reducing the risk of claim rejection.

However, this can be a challenge for a busy organization that does not have a specific individual to handle SR&ED claims.  CRA policy changes can be complex and require interpretation to understand fully.

SR&ED is a technical matter as much as it is an accounting exercise

An important step towards securing a SR&ED tax credit is to understand that the program is not a simple accounting exercise.  SR&ED is based on technical merit and therefore requires proper technical documentation, in addition to financial documentation.  Successfully achieving SR&ED funding goes well beyond the first step of discovering your company’s eligibility of the program.

Essentially, to qualify for an incentive, your business must demonstrate that it contributed to advancing an industry technology.  This involves a scientifically documented process of overcoming technical uncertainty and contributing to the advancement of a new 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.

Proper documentation of SR&ED projects is critical

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 and experiments to remedy unanticipated results, and documents explaining industry research, as these may be required when submitting your claim.

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.

Contact Enhanced Capital Recovery for a free consultation to find out how we can help you get the most out of your SR&ED claim.

SR&ED Claim Review? What to Expect from the CRA

What is the SR&ED Claim Review Process?SR&ED claim review CRA audit

The Scientific Research and Experimental Development (SR&ED) claim review is a process involving many steps and individuals. But what exactly happens at the Canada Revenue Agency (CRA) once your claim is filed? Here is what you can expect during the review process.

Determining if you qualify

The CRA’s first step is determining whether your company and projects meet the basic criteria. Are you a Canadian Controlled Private Corporations (CCPC)? Is your T661 form completed correctly? Has your company attempted to overcome a technological uncertainty? Have you used research and development (R&D) to advance technology?

This is also the stage where a CRA financial reviewer inspects whether the expenses you outline in your claim are eligible costs for SR&ED program funding.

Technical aspect review

Once the basic requirements have been determined, the CRA science advisor—sometimes with the assistance of an outside industry expert—further inspects the technical aspects of your claim.

This involves the review team analysing whether your project employed R&D to solve a technological or scientific problem. It will also investigate how you measured the success of your project, and to ensure the knowledge gained was innovative to your company.

Request for information

In some cases, the CRA review team will request additional information. This can provide further evidence to support your claim or to answer questions for clarification. Should this be necessary, you will be contacted by a science advisor with a specific request.

An outside consultant may also be contracted during this stage to clarify information for the review team. The CRA is familiar with all consultants and confidentiality is ensured in every claim.

Site visit or interview

The CRA may request an interview or site visit when verbal clarification or additional documentation is insufficient. During an interview, the science advisor, possibly accompanied by a consultant, will identify the areas of your claim that are unclear.

The interview may also be to determine whether the projects were sufficiently documented and that costs were spent as claimed. For this reason it is essential to document and organize evidence of your claim.

Enhanced Capital Recovery can ease the process

Allowing a tax consultant like Enhanced Capital Recovery to take care of your SR&ED claim can ease the review process and even reduce the waiting period.

An accurate claim, complete with industry-specific information, will leave the CRA with less reason to request information or site visits for clarification. Our consultants are knowledgeable with the entire review process and could identify additional qualifying projects.

To find out how we can provide efficient assistance in submitting your claim, contact ECR today for a free consultation by phone at 1-800-470-0235 or email us at info@enhancedcapitalrecovery.com.  We look forward to hearing from you.

Does My Company’s Work Qualify for SR&ED Funding?

Each year, the Canadian Revenue Agency (CRA) provides over $4 billion in tax credits through the SR&ED solutions Edmonton Vancouver TorontoScientific Research and Experimental Development (SR&ED) program, often to small or medium sized companies.

However, countless businesses across Canada miss out on these incentives despite satisfying the program’s criteria in their everyday activities. In fact, qualifying for SR&ED funding is easier than many think—here are the program requirements that your company may be satisfying right now.

Basic SR&ED criteria

The CRA outlines three requirements your business must complete to earn SR&ED credits:

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

While the experiments must be conducted with a measurable goal, they can involve basic or applied research—advancing scientific knowledge with or without an intended use in mind. For example, if your goal is to improve an artificial flavouring, it does not need to be used for a specific food or beverage.

Your projects do not need to be successful to qualify for funding, as long as you can provide evidence of the attempt.

Scientific research

There is a misconception surrounding the program’s scientific research aspect that it is reserved for medical, biological, or other laboratory research. In reality, the research can be as simple as a video game producer researching methods of advancing game play graphics.

The results are not required to be innovative to the industry, but the acquired knowledge or technological advancements must be new to your business.

Experimental development

Many small businesses qualify for experimental development as part of their daily activities without realizing it. Conducting experiments to create new products, machinery and manufacturing procedures are accepted, but so too are innovative services and support work.

Improvements to existing technology also qualify, such as adapting computer software for enhanced efficiency or improving the machinery to manufacture clothing garments.

What doesn’t qualify?

There are some types of research and experimental development that do not qualify for SR&ED funding. Since the projects must be conducted with a planned approach, any random or routine investigations are not eligible, including quality control procedures.

Work that can be classified as commercial gain does not qualify, such as promotions, market research, or the commercial use of a new technology. Experimentation to a product’s style is also not accepted.

Procedures related to mineral, natural gas, or petroleum production, including exploration and drilling, also do not qualify for SR&ED funding.

Companies that file a claim could receive up to 65% of eligible expenses returned as a tax credit. To determine if your business is fulfilling SR&ED program requirements, contact Enhanced Capital Recovery for a free consultation today.

Already Claiming SR&ED? SR&ED Consultants

If you currently claim the SR&ED tax credit, then you already understand the value and importance video 2 cover photoof it towards your bottom-line.  What you may not know, is, many claimants leave unclaimed funds as they miss identifying projects and related expenses because of an oversight or lack of understanding of the SR&ED process.

Recently, the CFO of a large western Canadian home builder felt they were under-claiming on their current filing and prior to filing it he invited Enhanced Capital to review claim. The resulting SR&ED claim increased 5 fold as an Enhanced Capital Specialist identified several additional projects that had been missed.

Had the CFO not called us prior to filing, his company would have missed recovering an additional quarter of a million dollars that the claim increased by due to the additional projects and expenses submitted.

SR&ED is 15% accounting and 85% technical. Failing to identify all eligible projects or not properly documenting can result in leaving thousands of dollars unclaimed.

This tremendous positive difference in returns should be left to the SR&ED experts, not to chance.

There are many examples of claims we have reviewed that did not clearly capture the challenges the organization faced and the obstacles and uncertainties that the CRA would understand and accept.

Our consultants at Enhanced Capital Recovery consist of Food Scientists, Computer Engineers and Manufacturing specialists who complete 100s of claims each year and have first-hand knowledge of what to claim and what to avoid claiming.

By matching the right technical expert for the job, we are able to help you identify all applicable projects and avoid overlooking any claimable activities – even those we find frequently left unclaimed by accountants and other consultants.

Chances are your competitors are maximizing their SR&ED tax refunds by utilizing experts to increase their competitive advantage; shouldn’t you be doing the same?

If you are already claiming the SR&ED tax credit, we can review your current claim to see if we can add value by identifying additional SR&ED eligible projects and related expenses.  We will review your technical documentation and identify improvements that will ensure that your claim has the best chance of success. Best of all, since we only bill you on the value we add, if we aren’t able to add any value and increase your claim, you do not pay us anything while still ensuring your risk of leaving unclaimed funds is minimized.

If your claim is under CRA review, Enhanced Capital Recovery can help support the claim and if your claim has been rejected, we can help to review it and improve future claims so they are not rejected.

Our track record of 90+% success in claim defence and claim review speaks for itself!

Regardless of your field, or size of business, Enhanced Capital Recovery is here to help with your SR&ED claim by reviewing your current or past claim. For a free consultation, call Enhanced Capital Recovery at 1-800-470-0235 or visit us online at www.enhancedcapitalrecovery.com  or email us at info@enhancedcapitalrecovery.com.  We’ll help you quickly determine if there is an opportunity to increase your SR&ED claim.

Enhanced Capital Recovery.  Driving innovation in savings and recoveries!

SR&ED Claims 101 for the Food Manufacturing Industry

Many food manufacturing and processing companies across Canada are fulfilling the criteria for food manu 2 Scientific Research and Experimental Development (SR&ED) tax incentives, yet few claim the available funding.   How can this be the case?

In large part it’s due to a variety of misconceptions clouding the SR&ED application process. The main misconceptions are about the size a business needs to be and the type of R&D that’s acceptable.  The fact is, businesses are not required to conduct laboratory research, or be a large-scale company.

So long as your business demonstrates a technological advancement or having solved a technical uncertainty, it could qualify—and those advancements don’t need to be as exceptional as you might imagine.

Who can benefit?

A wide range of food and beverage manufacturers may qualify for SR&ED tax credits. These can include:

  • Confectionary, dairy, starch and oil manufacturers
  • Seafood, poultry, egg, produce and fruit producers
  • Meat processing and slaughtering operations
  • Wineries, and beverage, tobacco, and specialty food companies
  • Pet and animal food manufacturers

Canada is home to thousands of food processing companies, in these categories and others. The best way to find out if your business qualifies is to arrange a no-obligation consultation with an SR&ED specialist.

What is technical uncertainty?

Establishing your company’s ability to overcome technical uncertainty goes a long way in applying for SR&ED funding—but what is it, exactly? It means that your business encountered an obstacle during a manufacturing or production process, and made steps towards solving it through your own investigation and without knowledge existing in the industry.

Examples could be a product confronted with challenges to its shelf life solved without using industry-established chemicals, or introducing a quicker process for enriching baked goods with vitamins and minerals to meet your distribution needs.

Technical uncertainty can be derived from something as basic as a new recipe resulting in unanticipated effects that your staff resolved using their own knowledge.

How might I have advanced technology?

Much like technical uncertainty, your company’s technological advancements in the industry don’t require laboratory examinations. Perhaps you increased your product’s flavour and texture using natural ingredients, or developed machinery for increased packaging efficiency.

The Canadian Revenue Agency awards merit of technological advancement based on attempt, not success. If your business encountered technical uncertainty, but failed to solve the problem, the research still helps the industry gain knowledge of the issue. The only requirement is that the effort was based on a systematic investigation—not random attempts.

Why is it important to track this information?

There is a good chance your food manufacturing business has made technological advancements, congratulations! But demonstrating these industry contributions is just as essential in applying for a tax incentive.

The criteria can be proved though conducting product trials and documenting the results, or indicating how the knowledge you gained will be applied to future development. It is important to record each development and research process fully in order to best qualify for funding.

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.

 

How to Maximize Your SR&ED Claims

Canada’s Scientific Research and Experimental Development (SR&ED) program provides over $4 engineer tools photobillion 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.