You may be wondering...
Click on the subject below to skip to the details!
- Who can file an SR&ED claim and what are the chances they will qualify for some sort of benefit?
- Is my product or technological advancement eligible?
- What are the eligibility criteria?
- What are the applicable industries?
- What if the organization has no taxable income or already receives grants or other sources of funding?
- What is the benefit, and can it be estimated prior to preparing the claim?
- Can I prepare an SR&ED claim without using an SR&ED consultant?
- Is there a deadline to file an SR&ED claim?
- Can the claim be audited or denied by CRA? What about confidentiality?
- Is there a deadline to file an SR&ED claim?
- What costs are involved in working with Advance-Tek?
- What can I expect my responsibilities to be?
- What can I expect of Advance-Tek?
Perhaps the most asked question about SR&ED is "Am I eligible?" Fortunately, unlike most other financial uncertainties, the answer can be quite simple and can be determined by asking: Do you innovate? Please review the collection of information below and contact us for a no obligation discussion about your scenario.
Any Canadian legal entity required to complete a T1 or T2 tax filing is eligible to submit an SR&ED claim if it is involved in efforts to innovate or enhance or integrate with an existing product or process. It is estimated that only 15% of eligible organizations actually file a claim.
To be eligible for SR&ED incentives, work must meet the legislative definition of “scientific research and experimental development” and must fall into one of the following categories:
- Experimental development – This is the work done to achieve technological advancement to create or improve new materials, devices, products, or processes. Most SR&ED claims involve experimental development.
- Applied research – This is work done to advance scientific knowledge with a specific practical application in view.
- Basic research – This is work done to advance scientific knowledge without a specific practical application in view.
- Support work – This is work that directly supports and is commensurate with the needs of experimental development, applied research, and basic research. This includes only the following 8 specific types of work: engineering, design, operations research, mathematical analysis, computer programming, data collection, testing, and psychological research.
- Only SR&ED done in Canada qualifies under the program. When work is carried on both inside and outside Canada, only expenditures for work done in Canada that meets the definition of SR&ED will be eligible for the incentives.
While there are definitions of “research and development” outside the scope of the SR&ED Program, only work that meets the previous definition and the following three criteria qualifies as SR&ED:
- Scientific or technological advancement – The work must generate information that advances the understanding of scientific relations or technologies.
- Scientific or technological uncertainty – Whether a given result or objective can be achieved, or how to achieve it, is unknown or cannot be determined based on generally available scientific or technological knowledge or experience.
- Scientific and technical content – There must be evidence that qualified personnel with relevant experience in science, technology, or engineering have conducted a systematic investigation through experiment or analysis.
While there is no explicit criteria that identifies specific industries, the most common to participate include:
- Agricultural Manufacturing
- Fabrication Shops
- Machine Shops
- IT Companies
- Bio-Product Companies
- Neutracutical Company
- Oil & Gas Technologies
The SR&ED claim amount is mainly derived from eligible expenses and typically excludes grants and other government funding amounts. The resulting tax credit comes in the form of cash or a tax credit, or a combination or both. In any event, there is a positive cash effect.
Yes, an SR&ED claim can be estimated. And once a claim has been processed and approved by CRA (Canada Revenue Agency), the applicant will receive a tax credit, usually in the form of cash.
The Claim Process
You and your team have spent countless hours working on the 'next big thing', and now you've learned that there may be an opportunity to recover a significant percentage of the financial investment involved in getting to this point. This may be, in fact, the second most important financial move since you first illustrated the idea on a paper napkin at the corner restaurant and sourced initial funding. You get one chance to prepare the claim, and it needs to be done right to ensure you take full advantage of the program and to avoid a CRA review and resulting delays in receiving your return. Please review the collection of information below and contact us for a no obligation discussion about your scenario.
Advance-Tek Consulting realizes that you are extremely busy running your business… This is our business! It is our job to ensure your claim is prepared with the utmost quality & accuracy.
Available human resources are at an all time high demand. You and your people are stretched to the max already. Trying to learn the “ins and outs” of the program while operating efficiently can be extremely challenging and ultimately quite costly. Leave the work to us and we’ll ensure that your SR&ED claim is done properly, submitted on time and your refund is fully maximized. After all – it’s your money!
An SR&ED claim must be filed within 18 months of an organization’s fiscal year end. This means that an organization may also be able to file a return for the previous year to capture additional eligible amounts.
Yes. This is why it is so important to get it right the first time. Advance-Tek demonstrates exhaustive diligence in identifying eligible expenses and in preparing claims. This completeness and attention to detail helps to ensure the claim’s integrity and validity.
Working with Advance-Tek
Let's put the cards on the table. You're busy. From managing your staff to payroll, and research and development to materials purchasing, your plate is full. That's where Advance-Tek comes in. We relieve you of the burden of having to dedicate an exhaustive amount of time working on SR&ED. This is what we do--it's all that we do, and we've been doing it for a long time. For you, this means that your involvement in recovering what could be a significant financial amount is made as convenient as possible. Please review the collection of information below and contact us for a no obligation discussion about your scenario.
There is nothing more important in this process than the security of the information used to prepare and file an SR&ED claim. While CRA has enacted policy to ensure that SR&ED information is protected and controlled, Advance-Tek has strict controls and mechanisms in place to ensure the same.
An SR&ED claim must be filed within 18 months of an organization’s fiscal year end. This means that an organization may also be able to file a return for the sprevious year to capture additional eligible amounts.
What costs are involved in working with Advance-Tek?
We are not compensated unless and until you receive SR&ED dollars. Our fees are dependant on many factors, but mainly the amount of involvement your organization will require from us to maximize its SR&ED benefits. The idea is two-fold. Firstly, we do not feel it is productive for anyone to worry about costs associated with telephone calls, site visits, or time tracking. Second, we feel that an SR&ED firm's compensation should be directly correlated to the benefit they bring to their clients. What a world it would be if lawyers...well, let's not go there.
A few meetings with you and/or your key personnel will be required to start gathering details pertaining to your claim. Your overall time commitment will be kept to a minimum, however to capture the most value from this program Advance-Tek must fully understand your company’s activities.
Advance-Tek utilizes a very technical approach in the preparation of SR&ED claims. While accounting is a very important part of the claim it is actually engineering and technology that is the cornerstone of SR&ED. During the process of compiling the claim we prepare the financial information in a format that allows your accountant to file the claim seamlessly with your corporate income tax.
- Identification of the technology in qualified projects
- Identification of the interrelated activities as part of the project
- Identification of all associated costs (Labour, materials, capital assets, sub-contracts, etc.)
- Assistance with your personnel in setting up company-specific tracking tools for your organization
- Full preparation of the technical and financial information needed for the claim
- Full support through attendance at any reviews (if required)