The Scientific Research and Experimental Development program (SR&ED) is a very lucrative cash or credit incentive at 15% – 35% depending on a company being CCPC or Non-CCPC. The program approves SR&ED claims based on either basic research, applied research, or experimental development that is trying to achieve advancements in scientific knowledge with a specific practical application in view (trying to solve the unknown). Many companies across Canada qualify based on the criteria however companies seem to miss out on the tax credit due to improper documentation and time tracking of SR&ED hours. Canada Revenue Agency (CRA) needs to see in good faith that the SR&ED projects undertaken by a company were their work within the fiscal year-end claimed. Many companies have ground-breaking products, services, and ideas but when it comes to documentation, they see this as very time-consuming and not worth it. Braithwaite Canada outlines the importance of documentation and time tracking when it comes to submitting an SR&ED claim by providing tools & expertise to assist in a much easier process.
With many new reviews introduced by CRA over the last couple of years (CAS, FTCAS, Financial reviews, etc.), it is important to document everything SR&ED-related. If a company is selected for review and no documentation is taken the company will sadly be rejected of their cash or credit.
The SR&ED program requires that documentation be:
Some examples of proper documentation for an SR&ED project are:
Just like documentation, time tracking is also very important to show CRA that routine work or admin work has been properly separated from SR&ED projects. Every company would love to charge 100% of their time to SR&ED but can it be proven? There are companies that introduce their own software programs but for others, a well-established product needs to be used by all staff. Below are some examples of software’s we have either used or have had clients use for SR&ED time tracking accuracy.
Some time-tracking products to invest in, for SR&ED are:
***We do not recommend free products for time tracking as it limits a company’s ability on users as well as if any modifications are needed.***
In summary, a well-thought-out SR&ED Tax Credit Claim is more than the uncertainty of technological advancement, but the establishment of proper documentation and time put into the project. We at Braithwaite strive to assist all clients with every single nuance of an SR&ED Tax Credit Claim.
How can Braithwaite Canada assist?
Braithwaite Canada takes a 7-step approach to maximize every R&D Tax Credit Claim filed to CRA (Detailed description of the 7-step approach).
For further information on how Braithwaite Canada can assist your company in successfully preparing an SR&ED Tax Credit claim to CRA, please contact us today.
Engage our experts to optimize your SR&ED claim process, manage the compliance burden and reduce uncertainty
900-2235 Sheppard Ave E
Toronto, ON M2J 5B5
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