THE LEARNING-CENTRIC APPROACH ©
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Short Guide to SR&ED
The Scientific Research & Experimental Development (SR&ED) Tax Incentive Program began in 1944 with the aim of stimulating the Canadian economy by incentivizing research and development within the country. The Canadian government refunds over three billion dollars every year to approximately 20,000 companies every year through the SR&ED Program. Rules governing the program are contained in the Canadian Income Tax Act.
The SR&ED program rewards companies acquiring knowledge about science or technology. Companies who conduct tests or experiments in particular have great potential to benefit from the program. Companies may claim SR&ED every year.
Your company must:
- acquire knowledge about technology or science through experiments, testing, or R&D
- operate within Canada
- have expenses in Canada as either salary (T4) or contractor invoices
If you meet the above criteria, it is likely you are eligible to benefit from the program.
The official eligibility criteria are: technological uncertainty, technological advancement and systematic investigation. These terms are explained in detail in our blog posts.
All industries in Canada are potentially eligible.
The definitions in subsection 248(1) of the Income Tax Act are quite broad and do not mention any specific industry. It can therefore be concluded that SR&ED credits are not generally restricted to certain industries or professions. There are few activities which are excluded from the program, but this does not preclude a company from claiming SR&ED for non-excluded activities.
Whatever time it takes to tell us about your activities. That’s all. You and your staff will write nothing, we do the rest of the work for you. We are a full-service SR&ED firm and we employ a team of technical writers and accountants whose job it is to draft technical reports, prepare, and submit SR&ED claims.
The CRA’s service standard is 90 days for most SR&ED claims. This applies to claims submitted by Canadian Controlled Private Corporations (CCPC). For larger companies or non-Canadian controlled corporations, the service standard is 240 days. According to CRA’s website, this standard is reached on over 90% of claims that are filed with the corporate tax return.
Use an approach that enables you to capture all eligible activities, no matter how small. Most companies in Canada simply claim obvious SR&ED projects. This means that many eligible activities, which may not be so obvious, are often left behind. The Sheldon Group’s Learning Centric Approach can help you to receive every dollar you are entitled to.
You may only be claiming half of what you deserve
Everyone who has claimed SR&ED knows the drill. You look for projects that would qualify and be long enough to claim. At the end of the process, you will end up with your larger projects which will make up the bulk of your claim. Smaller activities are often left behind. If this is what you do, you may only be claiming half of what you are entitled to.
The above method is called the “project-centric” approach and most companies in Canada use this approach. Thus, you are most likely leaving money behind.
The Sheldon Group has spent many years developing our Learning-Centric Approach© which enables us to capture every claimable activity.
The question is, how do you go beyond the standard approach?
Enter the Learning-Centric Approach
As you may know, SR&ED can be defined as the acquisition of knowledge that is not generally accessible to a competent professional in his field. This means that every time your company learns something which is not generally accessible, it should be part of your claim.
Most learning occurs randomly and unpredictably. This gain in knowledge is often times not associated with just one particular business project, or may be scattered many, even hundreds, of business projects. This is significant because ostensibly unrelated incidents of learning can often times amount to more dollars than your business projects. Thus, you may be leaving behind up to 50% of your claim, or even more.
The question arises, how do you claim seemingly unrelated incidents of learning?
The answer lies in the definition of a project in income tax law. It is possible for an SR&ED project to span many unrelated business projects, but only in an organized way which adheres to the criteria stated in the income tax act.
Ensure the success of your claim
The Sheldon Group has spent many years developing the Learning-Centric Approach which captures and analyses random incidents of learning to capture every claimable activity. Our experts weave in nuances of income tax law to ensure your best position for success.
It takes experience, knowledge, and attention to detail to identify eligibility, linearize unrelated activities, and properly document technological uncertainties and advancements. Allow our extensive knowledge of the SR&ED program combined with our exceptional approval rate help you receive the benefit you deserve.
Contact us today to see how your company can dramatically boost the value of your claim using our Learning Centric Approach.
SR&ED CLAIM PACKAGES
- No up-front fees
- Self-written technical reports
- Assistance to document your work
- SR&ED education session
- Compilation of accounting documents
- Representation with CRA
- Filing of SR&ED Claim
- Defense of claim in the case of a review
- Notice of Objection to CRA in the case of a wrongful denial
- No up-front fees
- Complete writing and editing of technical reports
- All features of the Essentials Package
In addition, our Full-Service Package includes:
- Learning Centric Approach – captures all eligible activities and maximizes claim value
- Patent and prior art searches – provides evidence of technological advancement
- Notice of Appeal to the Tax Court of Canada to overturn a wrongful denial