Over the years, there have been a number of myths and misconceptions regarding the basics of SR&ED claims. Although the process does require specific proof of industry improvement, there are still some false statements that circulate, deterring potential eligible innovators from filing a claim.
Preparing a SR&ED claim doesn’t have to be confusing, and with the help of an experienced SR&ED consulting service that provides expert assistance throughout the entire process, you can be sure your claim meets the proper requirements for government funding.
As SR&ED consultants ourselves, our goal is to educate Canada’s scientific innovators like you about availing of the tax return savings you may qualify for, and use towards advancing your work. Here, we clear up 3 most common myths and misconceptions about claiming SR&ED.
Myth 1: I Can’t Claim Because I’ve Received Government Funding Elsewhere
All government funding is to be given where it is due, regardless of other returns you qualify for. Our consultants explore your eligible expenditures, and once processed, you receive a percentage of the approved spending as a tax credit. This amount is completely separate from any other tax refunds you have availed of in the past.
Even if the other funding assistance you received covers SR&ED labour costs, this separate claim still provides you a valid return that will further your innovation going forward. In fact, there is a benefit to having already processed an additional claim, as all of your reports that may have been used previously can be of use to your SR&ED consultant for your new claim.
Myth 2: I’m Not In Technology, So I No Longer Qualify
There has been a focus on technological advancements in recent years when it comes to SR&ED qualification. This trend is only a reflection of the necessary adaptation to Canada’s Revenue Agency (CRA) that requires you to describe the foundation of technology that allowed your advancement to overcome an existing problem. This information is stressed in the new claim criteria, but many see it as a switch to a purley technology-based eligibility.
Because of this confusion, there is a believe that products and processes must be serving the technology industry, when what is really important is that the new development, within any industry, was based in technological innovation. Fortunately, our consultants can present your progress in a way that refers to the new CRA criteria, so your confusion doesn’t impact your application.
Myth 3: I Can’t File A Claim Without Documentation
It’s common for businesses to think they have an insufficient amount of documentation to file a claim. In reality, you may have evidence accessible to you that you wouldn’t expect to serve as proof of development. Pieces of information like dated purchase orders, or dated contracts with customers can prove when the work you were part of occured. Keeping a SR&ED folder or file case is a proactive way to avoid limited documentation, as you can add to the file throughout the year.
Most documentation is required upon review, so you do have time to backtrack and search for documentation if you remember valid pieces later on. However, this is not an organized way to approach your claim on your own, so our consultants can help ask the right questions in the beginning that will allow you to identify documentation you may not have considered. Estimates can also be drawn from what little evidence you may have on hand.
What is most important is that your work did occur, and that the expenses you are claiming correlate with your recorded work. We provide the technical reports and tax schedules that make it easy to show the CRA that you are breaking new ground in your industry.