Getting R&D funding from the government is a great way to not only put finances back into your business, but keep the Canadian innovation cycle going (should the benefits be put back into the next project). In Canada, there are over 200 government funding opportunities available, with one of the most lucrative being SR&ED tax credit. But while looking at all the funding options, it’s important to keep in mind one of the big benefit no-nos: DOUBLE DIPPING.
Let’s start with the Scientific Research & Experimental Development Program (commonly known as “SR&ED” or “SRED”). Every year, the government gives out over $4 billion to 20,000+ companies in Canada doing innovative work. It’s a fantastic program for companies involved in R&D, but if you plan on applying for other funding as well, or have accepted government loans, it’s important to note that you can’t get government benefits for the same project twice.
Where it gets especially tricky, and where the danger of double-dipping is fairly prevalent, is when the project involves an arm’s length sub-contractor. The company doing the actual work and the company issuing the work order can’t both claim the same project, even with separate SR&ED claims. It should be decided prior to signing the initial contract who owns the Intellectual Property (IP). That is the side that will claim SR&ED. Not both. That would be an example of double-dipping.
With that being said, what you can do is fill in cracks with other government funding. At BeneFACT, we want to make sure our clients are not just maximizing their SR&ED tax credits, but we also want to steer them in the right direction to maximize their funding as a whole. There are plenty of programs out there that take over where SR&ED stops – and it’s perfectly fine to accept both.
Often, if we see the opportunity for our clients to get further funding, we will send them in the right direction. For example, our partner at Onager Solutions, Mike Janke, brought to our attention the Growing Forward 2 program for companies involved in agriculture activities. As of January 1st, 2014, Capital Equipment was no longer eligible for benefits through the SR&ED program. Growing Forward 2 funds 35% of capital equipment that has been incurred since April 2013, or capital you would like to buy in the next year. The deadline to apply for this program is January 30th, however it may be worth the rush as the grant could be up to $100,000. Onager will assist with applying to this program, as well as many other funding programs you may not even know about!
Double dipping can have dire consequences on your claim, but it is possible to maximize your funding using more than SR&ED credits. You just need an expert consult to help guide you through the process.
For more information on SR&ED, contact a BeneFACT consultant today! And to learn more about other possible government funding you may qualify for, contact Mike at Onager Solutions.