5 Reasons your SR&ED Claim could be more valuable than you think.
SR&ED Claims can seem like a lot of work, with the tracking and reporting required by the CRA as proof of legitimate research, but it’s work that’s worth it. Here are 5 reasons why your SR&ED claims can make a big difference in your bottom line.
i. You don’t need to be a scientist to perform research.
Good business means constantly striving for improvement; this is true regardless of the product you sell, the service you offer, or the sector you belong to. When people think about research and technology, they often picture professionals with PhDs and white lab coats. While that can be true, it doesn’t tell the whole story.
Research is conducted in all sorts of settings – truly anywhere, and by anyone! As long as you can formulate a cohesive and properly formatted hypothesis, track your work, and keep good records, you’re a researcher – an innovator.
ii. Success? Failure? It doesn’t matter!
The objective of the Canadian SR&ED program is to drive the generation of new and ambitious ideas of all kinds, which means you can claim your successes and your failures. Yes, you read that right – you can receive funding for failures – because even in scientific failure, new and important knowledge can be gained.
To better illustrate what we mean, let’s take a quick look at the criteria for a successfully filed SR&ED claim, as outlined by the Canada Revenue Agency:
i. Did you begin by addressing scientific or technological uncertainty?
ii. Did the effort involve forming hypotheses aimed at reducing or eliminating that uncertainty?
iii. Did you conduct a systematic investigation or search, including formulating and testing hypotheses via experiment or analysis?
iv. Were you attempting to achieve scientific or a technological advancement?
v. Do you have a record of the hypothesis tested and the results as the work progressed?
So, you don’t need to solve a scientific or technological uncertainty. What matters is that you found one, and you are working to address it in a thoughtful and purposeful way.
iii. Small pieces of new knowledge count for a lot.
The SR&ED program applauds efforts in innovation, whether those efforts result in big changes, or incremental knowledge that helps you move in smaller steps. Regardless of the size of your project, or the depth of your hypothesis, research is research, and yours more than likely qualifies you for support from the Canadian SR&ED Program.
iv. You can claim many different kinds of expenses.
By now, you likely know that SR&ED is a business development incentive program which seeks to provide funding for research and innovation in the form of tax refunds.
Like any tax refund, the SR&ED program begins when you claim the expenses which pertain to your research. Expenses like:
Salaries and wages – yours and your team’s!
Materials consumed – from ink & paper to highly sophisticated equipment, it all counts
SR&ED contracts – that’s right, you can claim your consultant fee!
Overhead – your location, keeping the lights on, etc.
Third-party – any other contractors needed to fulfill the workload.
v. It doesn’t matter if your claim has been denied before.
This is one of our favourite parts of the SR&ED program – you can re-submit claims. Even if the CRA has denied your SR&ED claim for a particular research project in the past, you can feel free to re-file. However, the downside is that if your claim isn’t prepared properly, you could be charged a fee instead of earning a return.
Fear not! Maybe you’re a business owner who has filed a SR&ED claim before, or maybe you’ve never attempted a claim. Either way, Ward Weber Associates can provide personalized guidance and support as you seek to drive your business further. Plus, we guarantee that if you choose to partner with us, you will never be charged a fee for missing or incomplete information. It’s the Ward Weber Advantage, and we’re excited to share it with you.