SR&ED FAQ

 

What Is SR&ED?
Scientific Research and Experimental Development (SR&ED) is a federal tax incentive program offered by the Canadian Government to assist companies engaged in innovation. It aims to stimulate experimentation and technological advancement for the benefit of the Canadian economy.

Who Can Apply?
All Canadian taxpayers who file a T1 or T2 tax return and develop new products, or enhance/modify/improve existing products or technological processes can apply. BeneFACT has successfully assisted clients in industries including manufacturing, software & IT, biotechnology, food & beverage, tool & die, oil & gas, mining, machining and fabrication.

What Expenditures Are Eligible?
All project-related expenditures can be submitted. These typically include: salaries and wages, materials destroyed or used to build prototypes , work subcontracted to other Canadian taxpayers, and capital equipment.

How Much Can I Recover?
Canadian taxpayers can recover up to 82% of their expenditures, depending on their location (within Canada), ownership (Canadian vs. Foreign, Private vs. Public), taxable income (in the prior fiscal year), and size (amount of capital employed).Please click here to determine your specific rate.

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What Is The Maximum I Can Claim?
The SR&ED submission is not capped and therefore there is no predefined maximum amount that a company can claim. All expenditures can be submitted as long as the work meets the three SR&ED program criteria of technological uncertainly, systematic investigation and technological advancement.

How Much Time And Effort Will Be Required?
BeneFACT's proven methodology guarantees claim preparation with a minimum amount of time and effort on your part. Our consultants are industry experts each with Masters or Ph.D. degrees in a specific field of science and engineering. Their industry experience helps them to understand your technical challenges and quickly identify eligible projects and expenditures (with negligible impact on your staff or interference with your day-to-day activities).

How Much Will It Cost Us?
BeneFACT offers a convenient contingency fee structure. There are no initial or hourly costs. There will be no fee unless your claim is approved by the CRA and you receive your refund. Our business structure allows us to offer extremely competitive contingency rates, please contact us to find out more.

What Is Our SR&ED Filing Deadline?
The CRA filing deadline for the SR&ED submission is 18 months after the last day of your fiscal year. At BeneFACT, our initial filing can typically cover the previous two fiscal years. We prefer to submit applications for our clients well in advance of the filing deadline.

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How Long Will It Take To Process Our Claim?
Revenue Canada commits to processing refundable claims which are filed jointly with the year-end T2 within 120 days. Non-refundable claims are processed within 360 days. Amended refundable and non-refundable claims are processed within 240 and 360 days respectively. In our experience, most claims are approved within 2 to 6 months.

How Do We Know if We Qualify?
Most companies think of R&D as occurring in dedicated research facilities or a lab setting. However, this is not the case in the SR&ED program. We find that there are very few scenarios in manufacturing, IT, biotechnology and other industries where SR&ED does not take place. Contact BeneFACT to arrange for a free, no-obligation consultation to assess your eligibility.

We Do Not Do Any R&D
Many of our current clients did not initially consider any of their work to be R&D. This is a common misconception. Through the SR&ED program common, everyday activities on the shop floor or in an industrial setting are eligible - as defined by the CRA guidelines. Additionally, work does not have to represent a breakthrough or a 'quantum leap' in your industry.
Small incremental improvements and advancement in the design or formulation, materials, quality, durability, or energy efficiency of your product or process are sufficient. BeneFACT can conduct a free-of-charge assessment to determine whether your specific work qualifies for the SR&ED program.

We Did Not Have Any Taxable Income
Your company does not have to be profitable to apply for an R&D refund. SR&ED can be a refundable tax credit even if you did not pay taxes. In addition, any unused tax credits can be carried backwards 3 years or forward 20 years.

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Our Work Is Not New
The eligible SR&ED work only has to be new to your company. Similar or more advanced products and/or process may already exist in the marketplace. As long as you encountered technological challenges that could not be readily resolved using knowledge in the public domain, and you tried to resolve these challenges in a systematic manner, then you are eligible for the SR&ED tax credit.

Our Project Was Unsuccessful
The commercial or technological success of your product and/or process is not a determinant in assessing the viability of your claim. Failed, abandoned or postponed projects still qualify for the SR&ED tax credit. The technological advancement in unsuccessful projects lies in 'lessons learned' and in-house expertise accumulated in the course of your systematic investigation.

We Already Claim IRAP
Claiming IRAP does not preclude your company from benefiting from the SR&ED program. To the contrary, claiming both IRAP and SR&ED is to your company's advantage as the latter is uncapped and encompasses a much broader range of eligible activities.

We Subcontract Most of Our R&D
Work subcontracted to other entities on your behalf may be eligible for the SR&ED tax credit, subject to certain limitations. You must retain the intellectual property or rights to the work performed, and the subcontracts must be to other Canadian taxpayers with whom you deal at arms' length

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We Already Prepare Our Own SR&ED Claims
Many of our new clients experience a significant increase in their SR&ED refunds when using BeneFACT's comprehensive end-to-end services. We've found that several not-so-obvious entitlements and activities are routinely missed or under-claimed. A professionally prepared claim maximizes your refund, presents your work to the CRA in a proper, prescribed format, frees your staff to focus on core activities and greatly reduces the chances of financial and/or technical reviews. In addition, BeneFACT provides you with post-claim guidance to maximize your future claims and free SR&ED expenditure tracking tools.

My Accountant Is Already Taking Care Of Our SR&ED Claim
We offer a complementary service to that of your accounting firm. Because we focus exclusively on SR&ED tax credits, we are able to identify many obscure and often-missed entitlements that can constitute a substantial portion of your claim. We constantly monitor the latest government legislation and rulings in all jurisdictions to ensure our clients receive full credit for all their R&D activities. Many of our partner accounting firms rely on our expertise to ensure their clients have high-quality professionally prepared claims which maximize their benefits.

Will My Entire Business Be Audited If I Apply For SR&ED?
No. Historically, government auditors enhanced their careers by the volume of dollars recovered from taxpayers. SR&ED - on the other hand - is an incentive program to encourage innovation in Canada. The SR&ED reviews are separate from the CRA audits. For example, Revenue Canada clearly indicates in its publications that the SR&ED reviews do not extend into full business audits.

Can BeneFACT Ensure Confidentiality Of My Claim?
Many of our clients are engaged in the development of proprietary technologies. BeneFACT offers confidentiality agreements - in writing - to our clients before the commencement of each engagement. We guarantee that all information conveyed to us in the course of SR&ED claim preparation will be kept in the strictest of confidence.

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Who Is BeneFACT?
BeneFACT Consulting Group is a team of financial and technical experts dedicated exclusively to helping Canadian companies maximize their R&D refunds. We are Canada's premiere SR&ED experts and we offer the most comprehensive end-to-end SR&ED claim preparation services in the industry.

What Is The Background Of BeneFACT's Technical Consultants?
Our technical consultants hold Masters or Ph.D. degrees in relevant fields of science or engineering. Many have authored their own research publications. We understand your industry and our consultants will quickly and accurately identify all of your eligible projects. We simplify and guide you through the entire preparation process. Our technical experts prepare all necessary technical documentation with minimum time commitment or effort on your part.

How Experienced Are BeneFACT's Financial Consultants?
Because of our exclusive focus on the SR&ED claim preparation, we are able to constantly monitor the latest tax and government legislation and rulings for the SR&ED program in all jurisdictions.  This allows us to ensure our clients receive full credit for all of their R&D activities. Our experts will recognize even the most non-intuitive, unclear and complex expenses and ensure that they are included in your filing.

What Is BeneFACT's Success Rate?
We are very proud of our 100% success rate. We have secured substantial R&D refunds for clients in a broad range of industries including software & IT, manufacturing, biotechnology, food & beverage, oil & gas, mining tool & die (among others). All of our clients continue to work with us on an ongoing basis.

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What Is BeneFACT's Reputation?
BeneFACT has built a strong reputation with Revenue Canada auditors for accuracy, integrity and full eligibility of submitted claims. We are uniquely qualified to handle even the most complex SR&ED submissions. We guarantee to prepare on your behalf a complete, accurate, and fully compliant SR&ED claim that maximizes your entitlement in every eligible category.

Can BeneFACT Provide Client Testimonials And References?
To date, BeneFACT has filed successful applications in nearly all industries. We would be pleased to provide testimonials and references from other clients in your industry.

Does BeneFACT Provide Services Across Canada?
Yes, BeneFACT provides its comprehensive SR&ED claim preparation services to clients in all provinces. We will also assist you in applying for all applicable Provincial R&D refunds.

Are There Provincial R&D Tax Incentives?
Yes. Most Canadian provinces and territories offer complementary R&D tax incentives. The specific percentages of expenditures that can be recovered and refundability criteria vary from province to province. Our comprehensive services include application for both the Federal and Provincial ITC programs. Please click here review specific provincial tax credits available to your company.

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Where Can I Find More Information on the SR&ED Program?
Canada Revenue Agency's SR&ED
Provincial Income Tax Incentives for Research and Development

Can You Provide Me with Information Relating to Other Funding Opportunities?
Industrial Research Assistance Program
Natural Resources Canada's Grants and Incentives
Agriculture and Agri-Food Canada's Science and Innovation

Alberta
Alberta Science and Research Investments Program (ASRIP)

British Columbia
BC Innovation Council

Manitoba
Manitoba Research and Development Tax Credit

New Brunswick
New Brunswick Research and Development Tax Credit

Newfoundland and Labrador
Newfoundland and Labrador Tax Credits, Incentives and Benefits

Nunavut and Northwest Territories
The Risk Capital Investment Tax Credits Act

Ontario
Ontario Business-Research Institute (OBRI) Tax Credit

Prince Edward Island
Research & Development Initiative

Quebec
Quebec's Strategy, Research and Innovation

Saskatchewan
Research and Development Tax Credit

Yukon Territory
Yukon Research and Development Tax Credit

We Would Like to Apply For Our R&D Refund - What's the Next Step?
Please contact us to arrange for your free, no-obligation consultation to assess your eligibility. We will meet with you to present the SR&ED program, discuss your work and offer an estimate of your claim(s) scope and viability.

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