As a Canadian Controlled Private Corporation (CCPC) or a non-CCPC (Public entity), companies across Canada have the right and availability to take advantage of the Scientific Research and Experimental Development (SR&ED) Tax Credit each and every year. This tax credit Federally and Provincially allows companies conducting basic research, applied research, or experimental development by means of technological or scientific advancement to receive 15%-35% of their expenditures. Expenditures can include labour/salary costs, materials consumed, subcontractor costs, and any third-party payments. Unlike some grants and incentives, this program is available to all sectors with no cap on funding, it is an endless pool of cash or credit from Canada Revenue Agency (CRA). Since this is a very lucrative incentive, we still find many start-ups and small medium-sized enterprises (SMEs) not taking advantage of their innovation.
Is it really worth my time and effort?
Like many companies, time and effort into an application can be consuming as well as dealing with the government can be cumbersome. We want to ensure that the burden and stress of the application and process is taken away from our clients. For example, many start-up companies almost all, are conducting research and innovation within the first 1-3 years. There are a lot of growing pains when innovating a new product however most companies may not realize that the iterative process or failures they incur do qualify for SR&ED.
Here is an example of a start-up’s return on investment through the SR&ED program.
Whereas there is no limit to how many employees one company has, you can see with 2 employees working on the research and innovation this company can receive over $50,000 at their fiscal year-end. This cash refund can be utilized towards the hiring of more employees in your business, purchase new machinery, or expand the building for more production. What may be seen as routine to a company, is actually hard-earned tax dollars sitting there waiting to be collected.
What are you waiting for? Take advantage of the SR&ED Tax Credit today to receive money on your hard-earned work. Contact Braithwaite Canada for insights and eligibility on claiming your SR&ED today.
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