The Canadian federal government provides some of the most generous grants and funding opportunities in the world.
Through a tax incentive program, they offer tax deductions, tax credits, and cash refunds for companies partaking in certain innovative activities. Applying for grants and funding can be a complicated process and there are many ways to approach this issue.
Companies will typically choose one of three strategies when completing claims: individually without any help, using an in-house consultant , or outsourcing an external consultant like EVAMAX. See the advantages and disadvantages of each method listed below.
There are both benefits and drawbacks to companies filing claims internally without any consultants.
For starters, applying for a claim without any help can significantly save costs. Any fees related to hiring or outsourcing a consultant to complete the claim for you are avoided and can be utilized on other operations. Depending on the business, these fees can be very costly and rack up a high expense bill for the company.
On top of that, companies also do not have to share any financial or technical documentation to complete the claim. Many businesses are often hesitant to outsource grant and SR&ED work because there is a lack of trust with respects to the consultant.
By doing everything internally, the documentation does not have to be shared and you can ensure your security as well as privacy.
As for some of the drawbacks, applying for a claim without any help often leads to a higher chance of being denied or not acquiring all the benefits a company is entitled to.
Although filing claims internally may seem like a simpler way to apply, those who lack experience can overlook certain entitled benefits and ultimately reduce the potential size of the claim.
Also, if a claim is to be reviewed, the company will have to handle the CRA audit themselves. CRA reviews present complications and often require a thorough knowledge of the application process or claim in order to avoid a denial of your submission.
It is extremely helpful to have a knowledgeable and experienced consultant to assist you during CRA reviews to ensure you successfully receive the desired funding.
Having an internal consultant focused on grants and funding also has both advantages and disadvantages. The most apparent advantage would be the knowledge and skill the consultant brings to the table.
By having someone familiar with SR&ED and other application processes, companies can be more confident that their claim will be successful. There is a lot of information to gather, both technical and financial, that leads to tedious and time-consuming work.
Also, by applying for grants and funding internally, everyone will have the chance to understand certain aspects of the grant and SR&ED process. Although non-experienced employees lack the same depth of familiarity as an actual consultant, completing a claim in-house will present different perspectives and provide a thorough review of the application.
As for the disadvantages, there are unique skills needed in order to be an in-house consultant. Being specialized in SR&ED and other certain types of funding require experience and a skillset of specific criteria.
Also, by applying through in-house techniques, the application process is very time consuming which often does not work to the benefit of the company. Completing the applications in-house is a long and tedious procedure that may take away from valuable time in which employees could be doing something else that is productive.
Outsourcing to a consultant
Similarly to the other techniques, there are both benefits and drawbacks to outsourcing SR&ED work and other funding applications to an external consultant.
For starters, external consultants are experienced and have the right knowledge/skills to complete your claim. Claim reviewers, such as the CRA, follow a very meticulous and specific process when analyzing applications and external help can assist you in ensuring your claim is accurate.
On top of that, outsourcing can also eliminate time spent on completing grants and funding submissions. Instead of having an internal employee or paid in-house consultant, companies can focus on their own operations and allow the external consultant to take care of the application process.
As for the downside, outsourcing will incur fees that would otherwise be avoidable if a company were to apply through internal strategies. Different companies are eligible for different grants and funds, meaning that the cost incurred is contingent on the nature of the business.
Another potential downside is the fact that documentation must be shared with the external consultant. Technical and financial statements are needed to complete claims and access to these forms is necessary for an external consultant to successfully submit the application. Some companies prefer not to share this information due to a lack of trust or other privacy/security reasons.
Depending on the resources and nature of your business, any of these techniques may be the best solution for your company. Despite the specific benefits and drawbacks per each application strategy, they all have the potential to successfully claim all your entitled benefits.
If your company is looking to outsource your grants application, contact EVAMAX today! We help identify all applicable grants and tax incentives your business is eligible for and maximize your potential benefits.
EVAMAX serves 700+ clients all over Canada and confidentiality is on top of our priority. Call us at 1-877-711-7733 or contact us, today!