Navigating through R&D tax program gets cash back where it’s needed
September 1, 2011 (Edmonton) — Helping a client triple its previously unreported
eligible claims, from $400,000 to $1.2 million, to the taxman is just another
day at work for an Edmonton start-up that helps businesses recover dollars spent
on research and innovation.
Advance-Tek Consulting Inc’s exclusive SynergyDesk business and project
management software assists clients with their claims to Canada Revenue Agency’s
Scientific Research and Experimental Development Program (SR&ED), which provides
lucrative financial incentives to companies in research and development. As the
program’s tax credits are typically refunded in cash, client companies —
especially start-ups — not in a tax-paying position have another cash flow
source.
“Edmonton is a major player in the scientific research community,” says Mark
Wolff, managing partner at Advance-Tek, located at Edmonton Research Park. “From
biotechnology to nanotechnology, and medicine to oil and gas recovery
technologies, it would be difficult to find another city that has the diversity,
level of activity, and reputation for progress as the Edmonton market.”
The company works with clients to relieve their exhaustive burdens associated
with SR&ED data collection and claim processes, enabling them to budget and
project plan more effectively and conveniently.
Advance-Tek’s role is more than getting involved at the end of the year to
prepare a client’s SR&ED claim. “By maintaining year-round communication, we
guide clients on aligning projects and activities within SR&ED eligibility
boundaries. They are typically rewarded with higher-than-expected returns,”
according to Wolff. As SR&ED is a scientific incentive program, finance and tax
accountants may not be as familiar with it to maximize a client’s benefits.
“Being located at the Edmonton Research Park allows us to conduct business
without needing to worry about things like high rent and lease term,” says
Wolff. “Having the ability to use the park’s unique facility to help support
client requirements goes a long way in building credibility with both potential
and existing clients.”
“Advance-Tek is an outstanding example of Edmonton’s flourishing technology
sector. We provide a nurturing environment, complemented by facilities and
services, to develop and diversify Edmonton’s economy,” said Candace Brinsmead,
vice president of technology advancement at the Edmonton Research Park. “ERP
assists emerging companies like Advance-Tek succeed by reducing risk and
providing connections to business mentoring, equipment, facilities, funders,
marketing and other services.”
And that company that Advance-Tek helped recover triple its eligible claims? By
reinvesting those tax refunds into further development and commercialization, it
was sold soon after for $13 million.