You’re aware that your company could be using the Canadian Government’s SR&ED incentives to accelerate your R&D cycle – but how do you start the process of applying?
As SR&ED advisers, we’re ideally placed to guide companies of any size through the application. So, here’s a quick to-do list:
- Understand which expenditures and activities are eligible for the SR&ED program
- Document your experimental project work with contemporaneous records
- Prepare and file your tax return
- Submit a project description of your eligible research activities
- Report your expenditures
Now let’s expand on each step.
1. Expenditures and activities that are eligible for the SR&ED program
To be eligible for SR&ED, your company’s project must meet a scientific or technological uncertainty. In this context, uncertainty means a problem for which there is no solution in scientific knowledge or technology.
Eligible work needs to be a systematic investigation that involves experiment or analysis.
To learn more see our information about activities that are eligible for SR&ED.
2. Documenting your project work for your SR&ED claim
Maintaining documentation about your project will make the SR&ED claim process much easier. From the start, put in place processes for R&D work to ensure you document everything.
Examples of the technical and financial documentation needed includes logs, reports, prototypes, accounts and timesheets.
Your SR&ED claim adviser can support your company in streamlining documentation processes.
3. Preparing and file your tax return
The SR&ED claim is part of the tax return your organization files with the CRA each year. It’s important to meet the filing deadline as late submissions will not be accepted.
As SR&ED claim consultants, we can help you file your tax return.
4. Submit a project description of your eligible research activities
Your project description is a key part of your SR&ED claim. Briefly:
- You will need to state the scientific or technological uncertainties you were attempting to overcome.
- You will need to give an account of the work you performed during the tax year in question.
- You will need to say what advancements you achieved, or tried to achieve through the work.
Your SR&ED claim consultant can walk you through the process of describing your research work, ensuring that your project description is accepted by the CRA.
5. Report your expenditures
Your SR&ED claim will include a calculation of your spend on eligible projects. Although the CRA’s form T661 has a lot of guidance, an SR&ED claim consultant can help you to decide whether it’s to your advantage to use the traditional method or the proxy method to make this calculation. You may also need extra support with your application if some of the work was carried out abroad, or within a partnership.
Get expert support with your SR&ED claim
Expert support will ensure your SR&ED claim is right first time, saving you time and reducing your admin burden and helping you to avoid penalties. Get in touch to find out how an experienced adviser can help you with your SR&ED claim preparation.
Supporting business that contribute to the world through R&D