The Scientific Research and Experimental Development (SR&ED) program is a Canadian Government initiative meant for businesses conducting research and development in Canada. Successful applicants receive tax credits for eligible expenses to advance scientific and technological knowledge. Expert SR&ED consultants in Alberta can help you to navigate the eligibility criteria and the program policies, prepare all relevant documents for the application and guide your accountant and team to make sure you maximize your SR&ED tax credits while minimizing your risk of a CRA audit. They help you to file and claim tax credits, and also provide audit defense services if your claim is being reviewed.

Who Can Qualify For SR&ED?

Not every Canadian business can qualify for the SR&ED program. The following are the main categories of Canadian businesses that can qualify for the SR&ED program. Let’s discuss further.

• Basic research – Businesses that perform basic research work to advance scientific knowledge.
• Applied research – Businesses that perform research and development work to increase industry knowledge, keeping in mind a particular application.
• Experimental development – Businesses that perform R&D work to create new or improve existing devices, processes, or products.

4 Benefits of Hiring SR&ED Consultants

Filing and claiming SR&ED can be a lengthy and complicated process. Further, your claim might be reviewed. In both instances, SR&ED advisors in Alberta can help. SR&ED consultants also help provide strategic guidance to maximize SR&ED returns. Let’s discuss the benefits business can enjoy by hiring SR&ED consultants.

• Updated with changing requirements
  Similar to other government policies, the SR&ED program may involve routine changes related to various aspects. In this situation, businesses may find it challenging to keep up with these changes. SR&ED consultants stay updated with these changing requirements. It allows them to provide proper consultation to businesses to help them maximize their financial gains.
• Expertise
  SR&ED consultants have years of experience in dealing with various SR&ED aspects. As mentioned earlier, the process of claiming tax incentives can be quite complex. However, SR&ED consultants’ knowledge and expertise in the field can guide businesses in achieving the best results.
• Effective documentation
  SR&ED consultants ensure your claim is accurate, complete and submitted within the deadline. In this regard, they help you fill out the required form and ensure that you submit the proper documents to support your SR&ED claim. If your claim is reviewed, it can be a time-consuming process and cause a setback in your progress and delay much needed refunds. An experienced SR&ED consultant can guide you regarding the forms you need to fill out and the documents you need to provide to support your SR&ED claim. They will also work with the CRA and provincial tax authorities to make sure you receive your tax credits and refund in a timely manner.
• Maximise returns
  As a business involved in R&D work, you may choose to file your own SR&ED claim. But while trying to do it on your own, you may miss out on certain details that otherwise would have helped you gain additional tax credits and refunds while maintaining a good standing with the CRA.

Why should businesses hire SR&ED Hub Advisors?

SR&ED Hub Advisors helps businesses gain funding for scientific and technological advances. We also help businesses plan strategies to maximize their SR&ED returns. Besides, hiring our SR&ED advisors can help you experience the following benefits:

• Efficiently navigate the complex claim process
  As mentioned earlier, filing SR&ED claims can be a lengthy and complex process. Our advisors help to prepare your technical project description in a specific format that will ensure acceptance by the CRA. Further, following Canada Revenue Agency (CRA) guidelines, we ensure all project expenses are thoroughly reviewed and submitted. We collect every detail concerning your project’s scope and ensure your claim is organized and documented.
• Identify other tax credit opportunities
  As your SR&ED consultant, not only do we help you identify qualifying projects to maximize your SR&ED returns, but we can also recommend other grants and programs and connect you with our large network of experts that can help you secure additional non-dilutive funding.
• Prepare for CRA audits
  There is a possibility that CRA might review your SR&ED claims. In such instances, we will assist in the audit defense process by organizing and compiling necessary documents and carefully managing the communication with CRA to make sure we recover as much of the original claim amount as possible. Our expert guidance will help strengthen your audit defense position.

SR&ED Hub Advisors offers a wide range of SR&ED services across Canada. From arranging funds for strategic planning, to maximizing your tax credits returns, to filing and claiming SR&ED credits and audit defense services, we offer our expert guidance to small businesses and start-ups. As tech-based start up founders ourselves we aim to encourage businesses to make innovations and gain an edge in their respective fields. For all your SR&ED-related needs, SR&ED Hub Advisors is here for you!

The largest source of financial support for research and development (R&D) projects provided by the Government of Canada is the Scientific Research and Experimental Development (SR&ED) tax incentive program. However, only some R&D projects qualify for this program. Canada Revenue Agency (CRA) administers this federal tax incentive program. This blog will provide detailed guidance on the projects that qualify for the SR&ED program. You can hire an SR&ED consulting firm in Alberta for proper advice on the steps to file and claim tax credit and audit defense services.

Which Organizations Are Eligible For SR&ED Tax Credit?

SR&ED program encourages businesses to conduct R&D to improve existing products, processes, methodologies, etc. The following types of organizations are eligible for SR&ED tax credit.

• Canadian-controlled private organizations – These companies may receive a refundable investment tax credit (ITC) at the rate of 35% on qualified SR&ED expenses up to their limit for the tax year. Otherwise, they may receive a non-refundable ITC at the rate of 15% on the amount exceeding their limit.
• Other corporations – They can claim a non-refundable ITC at the rate of 15% on qualified SR&ED expenses.
• Members of a partnership – Based on the partnership level, the ITC amount is determined and distributed to qualifying members accordingly.
• Individuals and trusts–They can claim a refundable ITC of 15% on eligible SR&ED expenses.

Businesses need to determine their SR&ED expenditure limit. It will help CRA determine the refundable and non-refundable tax credits they may provide.

What Are the Types Of R&D Projects That Qualify For SR&ED Tax Credit?

Any R&D project that contributes to scientific and technological advancement is eligible for SR&ED tax credit. The following categories of work are eligible for SR&ED tax credit.

• Basic Research – These works help advance scientific knowledge without a practical application in view. These works often take place in laboratories and may be published in scientific journals.
• Applied Research – These works are intended to advance scientific knowledge with a practical application in view.
• Experimental Development – These works help accomplish technological advancements by developing or improving products, processes, materials, or devices.

What Other Support Work Qualifies For SR&ED Tax Credit?

Other work may also qualify for this tax incentive program, provided they support the basic research, applied research, and experimental development work. These support works might belong to the following categories.

• Data collection
• Mathematical analysis
• Engineering
• Operations research
• Design
• Computer programming
• Psychological research
• Testing

Which Types of Work Are Not Eligible For SR&ED Tax Credit?

The following types of work are not eligible for SR&ED tax credit.

• R&D capital expenditures
• Regular data collection
• Style modifications
• Sales promotion & market research
• Routine testing and quality control for products, processes, materials, or devices
• Commercial production of new or improved products, materials, devices, or process
• Research in humanities or social sciences
• Exploring or drilling for or manufacturing minerals, natural gas, or petroleum

What SR&ED Expenses Can Businesses Claim?

CRA considers some specific expenses to be eligible for the SR&ED tax credit. These include –

• Subcontractor fees
• Salaries and other wages
• Overhead expenses
• Lease expenses for equipment
• Consumables
• Third-party payment
• Some SR&ED expenses taking place outside of Canada

How much tax credit your business can expect?

Your business can expect the following tax credit.

• SR&ED Investment Tax Credit–You can expect a 15% federal tax credit for qualifying R&D expenses for eligible activities carried within Canada. The credit rate is increased to 35% for small Canada-controlled private corporations, and it is fully refundable.
• Provincial SR&ED incentives – Based on your provincial jurisdiction, the tax credits can range from 4.5% to 37.5%.
• Special Tax Credits – It is applied for specified industries, such as media, IT< film, and video games. Besides, enhanced tax credits may be provided to research conducted by universities, research centers, and research consortia.

When can businesses expect to receive SR&ED tax credits?

The SR&ED program has set the following service standards for processing claims.

• Refundable claims – 120 calendar days from filing the claim
• Non-refundable claims – 365 calendar days from filing the claim
• Claimant-requested adjustments to refundable claims – 240 calendar days from filing the claim
• Claimant-requested adjustments to non-refundable claims – 365 calendar days from filing the claim

How can SR&ED help businesses in claiming the SR&ED tax credit?

If you consider your R&D project to be eligible for SR&ED tax credit, you need to submit Form T661 to claim ITC. The deadline for filing and claiming tax credit is within 18 months after the end of the fiscal year in your company.

SR&ED Hub Advisors offers a wide range of SR&ED services in Alberta, such as providing SR&ED consultation, assessing whether your project qualifies for SR&ED tax credit according to CRA’s guidelines, and filing and claiming tax credit. Further, if your claim is audited, we will help provide required audit defense services, etc. Therefore, for all your needed SR&ED assistance, get in touch with our experienced team at SR&ED Hub Advisors.