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SR&ED Tax Credit Services R&D Tax Credit for Canada, US and UK Firms	- Request Estimate - Related FAQs

The Scientific Research and Experimental Development ("SR&ED") tax credit program, administered by Canada Revenue Agency (CRA), came into existence in 1985. Currently, approximately 11,000 companies claim for these credits annually, and approximately $1.8 billion is paid out in tax credits by CRA each year. This program is the largest funding program the Canadian Government has in the area of industrial research and development.

The United Kingdom Government has a similar program/incentive to boost business R&D and it is administered by the HM Revenue & Customs (HMRC).

In the US, the equivalent Research and Development (R&D) tax credit program was originally introduced in 1981 and a tax credit is a direct reduction of the tax liability.

Through our new Strategic Alliance with a renowned International Financial Advisory Firm we can now provide expert services for R&D Tax Credit submissions in any of those three countries.

If your company

• is improving or creating new products;
• is developing custom equipment or machinery; 
• creating or improving new manufacturing processes; or 
• developing prototype equipment,

then you may qualify for SR&ED tax credits, and that means adding dollars to the bottom line!

We have found that most of the companies claiming SR&ED without seeking professional advice from specialized SR&ED consultants, miss out on significant SR&ED tax credits. Areas usually overlooked include:

• Failure to identify all eligible projects usually because projects were claimed for product development only, and not process development;
• Failure to claim all eligible SR&ED activities within an eligible project, and
• Not being aware of all eligible SR&ED costs.

Operating as a government grant for Canadian controlled private corporations (CCPC) meeting specific criteria, a refundable tax credit is provided by the federal government at a rate of 35% of all eligible expenditure.  Provinces also offer R&D incentives. For example Ontario provides a 10% refundable tax credit.

Let's look at one example scenario: Assume three engineers were dedicated to R&D activities throughout the year at an average salary each of $70,000 per annum.  This expense would generate an approximate cash refund of $140,000 from the federal and Ontario governments, which would be a big boost to the cash flow of most SMEs.  What's more astounding however is how many companies believe that the administrative burden of filing SR&ED claims outweighs the benefits.  This should never be the case if proper advice is sought.

Also, a window and door company with sales of roughly $8 million received SR&ED tax credits ranging from $200,000 to $500,000 annually to improve its manufacturing process.  A start up manufacturer of custom equipment for the auto parts industry with sales of $800,000 in the first year, earned $500,000 in SR&ED tax credits given that heavy R&D spending was required early on to develop the company's core technology.

Our professional SR&ED Tax Credit Associates and senior SRED consultants provide SR&ED services to companies, both large and small, in the areas of manufacturing, computer software technology, biotechnology and many other industries.  Each consultant has considerable experience in preparing SR&ED claims and is fully conversant with the SR&ED tax credit rules and criteria.

A professional approach and excellent reputation with CRA has led to an exceptional success rate.  Our fee structure is price-competitive and can be based on a fixed fee or contingency success fee basis.  That means more dollars for the company!

Tips for Filing SRED Tax Credits

1. Make it easier on yourself.  Spend the time to set up a system to identify, monitor and capture SRED costs.  It will pay off in the long run.
2. Make sure you identify all eligible R&D projects and related expenditures.  This means the technical staff must be talking to each other, as well as to the financial staff.
3. Document your SRED activities.  Just keep a file with notes, e-mails, project plans, status reports, lab reports, patent applications, etc.
4. Engage our professional services early-on. Have us file your claim within 6 months of year-end.  If you wait to file after 6 months and before 18 months of year-end, expect delays to the review process.  If you wait longer than 18 months after year-end, the R&D tax credits are lost forever.
5. Do not fight with the CRA. Being overly aggressive in claiming expenditures as R&D means you will end up fighting with CRA.  This may prove detrimental for the company in the long run.
6. Immediately let us know if a dispute arises on initial review. We can help you resolve it.