What is SR&ED?
The Canadian Federal Government provides one of the most generous SR&ED tax incentive programs worldwide. These programs encourage companies to participate in Scientific Research and Experimental Design (SR&ED) activities by providing tax reductions, investment tax credits (ITC’s), or cash refunds as reward incentives. Any company in any industry can obtain funding as long as there has been an attempt for technological advancement/innovation. There is a criterion, however, regarding the types of research eligible for the program as one’s SR&ED activities must qualify as basic research, applied research, or experimental development in order to be considered.
Related: What Qualifies for SR&ED?
Depending on the goals and structure of the business, different companies qualify for different sources of funding, which may make it difficult to fully understand and maximize one’s benefits through SR&ED. Filling out claims are more technical than financial as the CRA is very specific and meticulous regarding the format and content of the report. Considering the complexity of the SR&ED program, there are trained SR&ED consultants like EVAMAX who provides clarity and maximize the benefits received by their clients through tax incentives/refunds. Below are a few benefits to outsourcing a SR&ED consultant rather than filling out claims internally.
Accuracy and Experience
As stated earlier, the process of obtaining funding through tax incentive programs can be very confusing and complex. The CRA uses very specific criteria when analyzing claims. Any guidelines that are not followed can lead to delayed or lost benefits. Assigning someone internally to complete SR&ED reports may seem like an easier and simpler way to do things, however, this can significantly decrease the potential return of the claim.
Those who lack experience may not be aware of which expenditures or projects are considered SR&ED qualified and can overlook certain benefits that they are entitled to. By outsourcing a SR&ED consultant, companies can focus more on their core business operations.
Meanwhile, SR&ED consultants can process the claims precisely using their skills, experience and knowledge. EVAMAX, for example, has a 98% success rate and is proven to increase SR&ED claims by an average of 38%. Learn more
Maximizing Benefits and Reducing Time
The CRA requires companies to follow a very systematic approach when filing SR&ED claims. This process requires gathering a long paper trail of both technical and financial documentation that can vary with specific activities and industries. Even if companies are able to assemble all the required paperwork, they may still incorrectly identify and complete the claim(s).
Evidently, the course of action for filing SR&ED claims is time-consuming and can be a waste of time, especially if the company does not obtain funding or the amount of funding they were entitled to. SR&ED consultants can take this burden off the company’s shoulders and reduce the greatest expense of any business, time. In the long run, the benefits of outsourcing SR&ED consultants outweigh the costs. Consultants identify sources of funding and avoid costs (or lost benefits) that would be incurred if SR&ED filing was to be done within a company by someone who is inexperienced.
The SR&ED program implemented by the Canadian federal government is a tool that not enough companies have taken advantage of. More companies should look to find grants and funding through this program in hopes of growing their business and maximizing potential benefits.
EVAMAX has been helping companies recover up to 68% of their qualified costs for SR&ED projects. Hiring an outside SR&ED consultant can act as another set of eyes and second opinion for the company by aligning the interests of both parties. SR&ED consultants do the tedious work for you and will produce results that recover all of your entitled benefits.