SR&ED Tax Credit Program

H0w how you can receive a cheque from Revenue Canada’s SR&ED Tax Credit Program… AND how you don’t need a research department to get substantial cash-back tax credits each and every year.

Any industry is eligible. Whether you’re a 3-man machine shop in British Columbia or a large furniture manufacturer in Nova Scotia  – if you tried something new, you operate in Canada and employ Canadians, you may be eligible for the SR&ED Program.

It does have to be a technological advance, or some technological obstacles overcome. We’re not talking about a new brochure or a sales trip to Atlanta! And, of course, a systematic way of recording what you did is part of it too.

And it only takes one conversation with the right person to find out if you have a valid claim.

No matter what industry you are in, you can qualify for a cash refund, which means you receive a cheque in the mail from Revenue Canada in 3 – 6 months.

For instance, in Ontario you can recover up to 68% percentage of salaries, 41% of contract payments and equipment leases, and 41% of contractor costs, offsetting the cost of any research activity you may be doing.

If necessary, have your unused tax credits carried back 3 years or forward 20 years, giving you the benefit of tax credits for years to come.

Have a SR&ED engineer who is knowledgeable about your industry analyse your situation and identify activities, expenses, and processes that are often overlooked, ensuring you are getting the maximum return from your claim.

Increase your R&D budget (knowing you will get almost half of it back), allowing you to become more competitive.

Avoid any financial risk, since contingency-based compensation only happens if your claim is successful.

So what are the biggest risks you have in taking action and applying for a SR&ED tax credit claim?

One risk is the application may not be successful. A SR&ED tax claim is roughly 15% accounting and 75% technical. You have only 1400 words in the SR&ED  application to justify your case, and this is where many claims run into trouble. The technical language necessary to ensure Revenue Canada your claim is legitimate is best composed by an engineer who has worked in the field and is familiar with what the government is looking to hear.

To maximize the amount of the tax credit you get each and every year, and to ensure the time spent on your claim is worthwhile, we recommend you consult a SR&ED engineer who:

1.  has an engineering degree and engineering background

2.  has 10 or more years engineering experience in the field

3. has a knowledge base of SR&ED claims in your industry to benchmark your claim against

4. and has a success rate of over 98% doing many years of SR&ED claims.

SR&ED consulting is an unregulated business. Here’s what you need to avoid:

1. A SR&ED consultant who has no engineering background, and has to spend many valuable hours getting up-to-speed on your work-flow and technology

2. Someone who does not have a deep knowledge base of industry-related SR&ED claims to draw from

3. Large accounting firms that have SR&ED claims as an add-on service, rather than as a core area of expertise.

The other risk to you is financial, meaning you may miss out on your share of the 3 – 4 billion dollars the Federal and Provincial governments pay out in SR&ED tax credits each and every year to companies much like yours.

SR&ED tax credit consulting as a service is contingency-based, meaning your consulting expert only gets paid if your claim with Canada Revenue is successful. Fees average from 15 – 28% of the full claim.