If you want to find out whether you qualify for SR&ED tax credits, Elite Innovators Canada (ELC) offers a complimentary, no-obligation evaluation of your business. Many companies miss out on making an SR&ED claim because they mistakenly believe the program is limited to "High Tech" enterprises. In reality, almost any business might have "pockets" of SR&ED activities occurring at any time. Generally, if some of your staff are working on solving technological problems where the solution is not immediately obvious, there is a strong possibility that the work being done is fully or partially eligible for SR&ED credits. In fact, many companies that receive SR&ED credits are considered relatively "Low Tech," such as industrial manufacturers and agriculture firms.

The SR&ED application process consists of two parts: an essay-style writeup detailing the technical aspects of your work and administrative tax forms to allocate expenditures to your project. SR&ED consulting firms like Elite Innovators Canada (ELC) will interview a knowledgeable representative from your company about the R&D project you conducted. We then present your work in the best possible light to the CRA by completing the technical essay on your behalf. ELC’s SR&ED consultants also handle the administrative SR&ED tax forms for you. We gather payroll details of employees involved in the R&D project, along with any subcontract and material costs your business incurred, to apply for the maximum SR&ED rebate you are entitled to. Finally, your SR&ED consultant will submit your application to the CRA and manage all post-claim administrative tasks until you receive your cheque from the government.

Any and all SR&ED reviews are conducted before the government approves your SR&ED claim and issues your refund. The government prefers that you use your SR&ED refund to hire more staff and expand your business, rather than setting it aside for a potential future audit. Additionally, it is important to note that an SR&ED review does not initiate a general audit of your corporation. SR&ED is managed by a distinct division within the CRA, and they do not investigate your other business activities when reviewing your SR&ED claim.

You may hear your SR&ED consultant refer to SR&ED as either a tax credit or a grant. While SR&ED is technically classified as a tax credit, this often leads to confusion, as many people mistakenly believe that SR&ED credits can only be used to offset taxes payable to the government. In reality, for private Canadian companies, SR&ED is a refundable tax credit. This means it functions like a grant because once your claim is approved, the CRA issues you a cheque with no strings attached. It is entirely possible for a technology company to structure its SR&ED claims in such a way that it never pays federal or provincial corporate taxes again. Additionally, the company would receive an annual SR&ED direct deposit for the difference between the credits awarded and the corporate taxes owed. Talk about a competitive advantage!

Your SR&ED refund is essentially a rebate on expenses that your business has already incurred in a previous fiscal year. Once we identify a qualifying SR&ED project, we can examine three types of expenses eligible for a SR&ED rebate. First, payroll expenses for employees involved in the project can be recovered at a rate of 65 cents for every dollar spent. Subcontractor expenses can be recovered at a rate of 35 cents per dollar spent. Finally, costs for scrap and prototype materials used in the SR&ED project can also be recovered at a rate of 35 cents per dollar spent. Assigning expenses to qualifying work is a straightforward process for a professional SR&ED consultant.