SR&ED Tax Credit Program
The SR&ED Tax Credit Program is all over the news right now, but how much do you really know about it? Did you know that even small companies and start-ups can successfully claim? It’s all about your passion for contributing to innovation in Canada. Even if your project fails, you can STILL submit a claim. There’s so much to learn about SR&ED, but where do you start?
Do Your Research
Knowledge is power – and could mean funds for your company! Now is a great time to explore the inner workings of the Scientific Research and Experimental Development tax credit program as there are a fair amount of media publications discussing the current legislative changes and reviews. Keep your eyes peeled on The Hill Times, The Globe and Mail and The National Post for updates.
Attend a Seminar
If you’re new to the SR&ED process, you may find it extremely daunting to go it alone. You may not even know that getting a tax credit on your project is an option. Learning about SR&ED in a group setting with someone who knows the business inside and out may be the perfect solution for you. A seminar or webinar offers a basic overview of what the program is about.
Call a Consultant
Of course, the best way to get better acquainted with the entire SR&ED Tax Credit program is to call a professional. One of the main complaints about SR&ED is that it is complicated and confusing. A consultant knows what to look for, so nothing is missed. Plus, by having a consulting group handle the paperwork, your employees can concentrate on other tasks within the business.
Did you know that Industrial tax incentives in Canada have been in place since at least 1944?
- 1944-1986 Traditional tax deductions and tax credits for R&D are introduced.
- 1987-1993 Moderated abuses and a more simplified administration introduced.
- 1994-Present Clarified definition of experimental development, broadened eligibility re: Qualified Small Businesses, allowed proxy calculation for overhead, conducted major review in 1998, simplified forms, conducted major review in 2010.
- Oct 2011 The Canadian government commissioned an expert panel (The Jenkins panel) to conduct a comprehensive Review of Federal Support to Research and Development.
The SR&ED program is intended to encourage businesses of all sizes, particularly small to medium and start-up firms, to conduct research and development (R&D) that will lead to new, improved, or technologically advanced products, processes, devices, and materials. The Canadian SR&ED tax incentive is the government’s largest single support program for R&D. Each year the SR&ED program provides over $4 billion in investment tax credits (ITCs) to over 18,000 claimants. Of these, about 75% are small businesses.
Don’t let your tax credits go to waste. Contact BeneFACT today for more information on how we can maximize your SR&ED claim.
Your Development Project Failed, Now What?
Do you still qualify for SR&ED? One of the common misconceptions about the SR&ED program is that your projects need to be successful to be eligible. In actual fact, projects that have failed often make the best type of SR&ED projects, as they fundamentally meet one of the three eligibility criteria; Technical Obstacle.
Failures are common on the path to technical advancement. Understand and document the failure and all failed methods or attempts. Record what you attempted to do, and what happened as a result. Learn from the failure and then file a SR&ED claim outlining all associated costs of doing that work, if it qualifies. The program allows for these failures to be eligible as an incentive for the government to help reduce the burden of risk on companies who strive to develop new products and processes by reimbursing them for their efforts.
Don’t let your tax credits go to waste. Contact us today for more information on how BeneFACT can maximize your SR&ED claim.