SR&ED stands for "Scientific Research and Experimental Development".
SR&ED is a Canada-wide tax credit that can provide fast refunds even to companies that do not owe tax. Related provincial programs such as OITC in Ontario are administered along the same rules, and add to the total percentage that can be credited. Since they follow the same eligibility rules, we often speak of SR&ED along with the corresponding provincial programs, as simply "SR&ED".
How Much Money can Be Refunded
If your business employs people to do research and development, or who have responsibilities that include research and experimental development, you can get back up to 73% of what you paid your employees for the innovative work. That kind of tax relief can really add up. Other businesses can claim SR&ED too, under a traditional method which allows contractor and overhead expenses.
We have prepared a simple form that will help you find out how much SR&ED refund you could expect.
Qualifying for SR&ED
Almost every Canadian company engages in some form of SR&ED eligible work, whether by making technologies to solve issues that off-the-shelf products can't solve, or by pushing the technological envelope to outmanoeuver the competition. And if your company isn't innovating, then perhaps the SR&ED tax incentive program can convince you to innovate next year.
Some SR&ED consultants propose that it makes sense to claim SR&ED only if a certain volume of work has been done, to justify the administrative costs of documenting that work and explaining why it is SR&ED. However, we often propose to submit claims even for small or starting projects, to establish a clear history for a project and proper accounting practices for documenting scientific experimentation and advancement.
Suggested Next Step
To encourage you to think more about SR&ED, we make available free online tools that help you to understand SR&ED tax credits, and which even help you to prepare a SR&ED claim. These free online tools can help any potential claimant because they guide you through a proper assessment of eligibility.
Is a Do It Yourself (DIY) Option Available?
Preparing a SR&ED claim without assistance is possible, but it can take 40-80 hours, or even longer for inexperienced claimants. TCEG can help you complete the claim in less time, using a focused yet thorough approach, which also improves the likelihood of success.
Some clients do choose to prepare their own SR&ED claims, but appreciate having TCEG review the claim before it is submitted to the CRA, greatly improving the likelihood of success.