SR&ED is a generous program that pays out $3billion–$4billion every year in tax credits to Canadian companies, individuals and organizations carrying out R&D work. The program aims to encourage businesses to pursue technological advancements and clarify scientific uncertainties.
If your firm is pursuing scientific or technological innovation in Canada through R&D, you’re entitled to valuable benefit, and you should take full advantage.
We can provide advice on getting the most from the SR&ED program. Book a call to find out more about the benefits of partnering with an SR&ED expert.
SR&ED gives start-ups and small firms a boost
Three quarters of the beneficiaries of the SR&ED program are small businesses. The program benefits organizations that are improving existing technology or developing new technology, processes and products. The results of R&D can give the organization a competitive edge, and support them as they scale up their activities.
The reduction in corporate tax liabilities realized from the SR&ED program could make the difference between your organization falling behind or outpacing its competitors in a race to develop a new technology.
The reduced tax liability can also free up capital, giving your firm the financial freedom to innovate and invest in improvements that accelerate growth.
As well as giving companies the freedom to develop their processes and technologies, participation in SR&ED also fosters a culture of innovation within the organization, and promotes a cycle of improvement. These are both characteristic of successful businesses.
What will my organization get if I claim for SR&ED projects?
A successful SR&ED claim will net a Canadian controlled private corporation a refund of at least 35% on eligible expenses (under $300million) and 15%–20% if over $300million.
The refund comes in the form of tax credits, which can be set against the tax bill for the fiscal year just ended. The unused credits can be refunded as cash, or they can be carried back three years, or carried forward for a period.
You may also be able to claim a deduction against income when you submit your tax return.
How much could I claim from the Canadian SR&ED program?
The amount you can claim back in tax credits from the Canadian Government for your research and development (R&D) work will depend on the nature of your project work. To get an idea of how much you can claim, use our SR&ED calculator.
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