SRED Tax Consultants | Conceptinero | Ontario | https://conceptinero.com
SR&ED is the Scientific Research and Experimental Development tax credit. If your company focuses on software development or interactive and digital media projects, this is an excellent funding resource. Unfortunately, many companies find the process of applying extremely confusing.
As a result, many eligible businesses miss out on accessing up to 64% of their project expenses. Another common mistake is thinking your software project won’t qualify.
Here is a quick guide to SR&ED eligibility for software development activities.
Here are the factors used to qualify companies for the SR&ED tax credit:
According to the Canada Revenue Agency (CRA) a business with work that “advances the understanding of scientific relations or technologies, addresses scientific or technological uncertainty, and incorporates a systematic investigation by qualified personnel” can qualify for the tax credit including:
Each type of company has varying degrees of funding available.
Eligible projects include:
The CRA then uses the following criteria to determine eligibility:
If you are a startup in the pre-revenue stage, you are in fact still eligible for the program. As long as you meet the criteria above, you can receive a significant cash refund on eligible R&D expenditures. This refundable tax credit is available whether you pay taxes or not and it is actually very beneficial to companies in your situation. The refundable portion of the tax credit is perfectly suited for your situation as the government wishes to fund small Canadian businesses to help keep tech knowledge in Canada.
The government is not supportive of projects designed with commercial advancement in mind. It is based on technology, as opposed to companies trying to be the first to market with a product. After the fact claims about how much time and money was spent on the project is also the wrong approach to take. Routine platforms, methodologies or techniques applied to your project reduce the likelihood of being eligible. So how can you establish your company goes beyond the realm of readily available information? Due diligence to suss out the competition certainly helps. You can:
Any of this information can be included in your documentation when you apply. The trick is to ensure you have qualifying expenditures. Success is not what will interest the CRA. Instead, they are there to assist those faced with uncertainty as it presents more potential for technological advancement.
Your company must show your work requires experimental development iterations that went beyond routine software development. As well demonstrating you achieved a systemic advancement and that your performance metrics go beyond the published capabilities of integrated platforms helps strengthen your case. If you have at least two of these three advances, isolate them and present them as the basis of your SR&ED projects.
Trial and error do not cut it when applying for SR&ED. Instead, you have to show a scientific method such as:
Showing how and why you were able to extend your company’s knowledge base beyond the publicly available knowledge base is the best way to qualify for the SR&ED tax credit.
We have excellent examples based on over 150 companies we’ve helped gain access to SR&ED tax incentives including:
If you want to pursue access to SR&ED funding, our team has helped companies access over $30 million from the tax credit. Speak to one of our SR&ED consultants to make the best chance of getting funding for your R&D projects!
We are a full-service professional SR&ED Consulting Firm specialized in the Medical Science, Software and Manufacturing industries. We have a 95% success rate in getting CRA to refund up to 65% of your research and development costs.
We engage with you to assess the technical and financial viability and make sure your claim gets approved by CRA without an audit. We have submitted $50M in claims to the CRA. Over 320 claims were accepted as filed, for an average $146,000 per company.
Unlike larger SR&ED consulting firms, we offer full service from an individual consultant who gets to know your team and fully manages your CRA claim. We don’t expect you to do the heavy lifting, which means maximum results with minimal input from your team so you can focus on your business.
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