SRED Tax Consultants | Conceptinero | Ontario | https://conceptinero.com
Companies can claim up to 68% of R&D costs from the Canada Revenue Agency to support your software research and development projects. However, without proper records, it will be difficult to receive a refund from the CRA.
This exceptional SR&ED tax credit greatly offsets the costs associated with R&D, yet many companies fail to reap the benefits of this credit due to a lack of proper documentation.
For software development projects, generally most of the work is based on payroll expenses of your own team, or for R&D work outsourced to a software development company. In both cases an essential part of the documentation is based on tracking the time spent on the R&D activities. It’s important to have an effective SR&ED time tracking system for projects eligible for this tax credit.
Here’s how to leverage SR&ED time tracking to ensure your projects eligible for the tax credit qualify.
Since your tax credit is calculated as a percentage of the salary/money spent R&D, what you provide to the CRA should outline how much time was spent, what was done during that time, and findings of each day’s work. Every day is important with documentation that clearly indicates what time is spent on SR&ED and non-SR&ED work. By doing so, you improve efficiencies and can reconcile total hours spent with a breakdown of both eligible and non-eligible hours. All software developers, therefore, must understand what activities qualify for SR&ED and what activities don’t.
They should also share the same time tracking process, so all hours are being tracked in the same manner. For example, each developer should use the same categories such as “development”, “testing”, and “project management” so all hours are collected consistently and can be calculated collectively from each team member.
It’s okay to use your existing project management platform to track your time. In fact, this makes it easier for team members as they are already in the habit of using the system. Introducing new processes can lead to errors and inconsistencies. If you don’t use a project management solution, then you can choose one of the following time tracking solutions:
The bottom line is that consistent timesheets with all hours accounted for make it possible for time tracking to be accurately calculated as a percentage of eligible hours spent for the tax credit.
Finding the best solution for time tracking is just one step in a successful application for SR&ED tax credits. If you want optimal results, it’s best to get professional advice from a SR&ED Consultant before your project even begins. Contact the Conceptinero group for help to maximize your SR&ED tax credits.
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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