Shredding Common Misconceptions About SR&ED

SR&ED Are You Sure You’re Getting the Money You Deserve? Yes, we know, it’s an old story now – the Scientific Research and Experimental Development (SR&ED) tax credit program has been providing Canadian firms with some of the richest R&D incentives in the world for decades. That being said, due to some very common misconceptions, there are still a large number of firms that do not access the program at all, or do not access the full value of the cash and credits they rightly deserve.

“We don’t do R&D” – This sounds a bit tricky at first, but the large majority of the firms that make successful SR&ED claims don’t do traditional R&D – they do Experimental Development. What this simply means is they are working with their products and manufacturing processes to achieve incremental technology advances. If you are developing products, including software, or undertaking manufacturing operations in Canada, then it is very likely that some of your work will meet the definition of experimental development.

“Didn’t the government just change all the rules” – Over the past few years, the government has changed some of the rules about what spending can be included in the claim, but overall, the program remains one of the most lucrative in the world. In addition, there haven’t been any changes to the type of development work that is eligible. In fact, recent court cases and policy refinements have made things more clear in terms of what should and shouldn’t be considered SR&ED.

“We don’t have any scientists or engineers” – You don’t need any to be doing SR&ED. A great number of firms make successful claims without any scientists or engineers on staff – they have technically competent and qualified people doing work. Successful SR&ED claims are full of programmers, technicians, skilled tradespeople, and equipment and process operators – these are people both leading and supporting the problem-solving process.

“We missed our chance. Our big projects started last year” – The SR&ED claim becomes part of your annual tax return, so, each year, you prepare a SR&ED submission for the work you performed and the money you spent, in that year. It doesn’t matter when the project started or whether you filed a SR&ED project for that initial year of the project – you just pick up the project where it’s at as the tax year you’re evaluating begins. It also doesn’t matter when the project ends – you claim the project in successive tax years for the work done and money spent in each year.

“I didn’t know all of that. It really seems like we should reconsider what this program means for us” – Exactly – we couldn’t agree more. Give us a call Toll Free at 1-855-TAX-BACK (829-2225) to learn how the BeneFACT Consulting Group Team can help maximize your claim!

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SR&ED Claim Filling Deadline – June 30th

SR&ED Claim Filling Deadline June 30Are you ready?    

The deadline to submit your SR&ED claim is approaching full speed ahead… All aboard! 

Administered by the Canada Revenue Agency (CRA), the Scientific Research and Experimental Development (SR&ED)  program is the most generous of its kind in the world! Over $3 billion is paid out annually to over 20,000 corporate participants.  However, there are still a large sum of companies that are not taking advantage. Don’t miss your opportunity to take advantage of the SR&ED program!

For those companies with a December 31st, 2012 fiscal year end, the absolute last day of the 18 month deadline for submitting your SR&ED claim is June 30, 2014.

Already filed your tax return?

No problem – you have until the filling deadline to add a SR&ED claim to your return as CRA will allow for a reassessment. Don’t let a small mistake on the proscribed forms prevent you from accessing the SR&ED tax credits that you are entitled to.

BeneFACT Consulting Group has a team of financial and technical experts dedicated exclusively to helping Canadian companies maximize their R&D refunds. Speak with a BeneFACT SR&ED expert today to learn more about the SR&ED program to see if your company’s activities qualify for this lucrative tax credit.  Get the information you need to start maximizing your claim today! Toll Free: 1-855-TAX-BACK (829-2225)

*The information above is meant for informational purposes only, and not to be used as financial or legal advice. 

Find out more about BeneFACT’S SR&ED Program click here

 

Contingency Fees at Risk for Select Tax Credits

Risk UncertaintyJust when you thought it was okay to stop and take a breath, the contingency fees issue forced itself to the top again. Although not directly related to SR&ED tax credits, this new development is worth keeping an eye on.

Contingency Fees in Hot Water

Earlier this month, Bill C-462 was introduced by MP Cheryl Gallant. This bill restricts the percentage promoters of the disability tax credit can charge for their services. In some cases, promoters are said to be charging up to 40%. This bill has received wide support across the board from all members of parliament and is expected to be law. Yes, it is important to make sure those in need are not being taken advantage of. But is this the first definitive move toward making contingency fees extinct for all tax credits, including SR&ED?

The contingency fee payment system in the SR&ED community has experienced much debate in the past few years. In 2012, the CRA asked for feedback about practitioner fees and saw no major problems with the fee structure at this time. What has been implemented is the new Part 9 section. This information is to be filled out as part of the required tax forms for submitting a claim. Part 9 requires an outline of 3rd party consultants involved in the claim as well as fees that were charged.

Could SR&ED be next?

There has been a small amount of worry about whether or not this may set a precedent for other tax credits, primarily SR&ED tax credits. For now it appears that SR&ED contingency fees are fair in the eyes of the regulators; however who knows where talk will lead and it’s definitely something to be vigilant about.

Keep up to date with the newest SR&ED tax credit announcements by following BeneFACT Consulting Group on Twitter and Facebook.