Home to thousands of large tech companies nestling in the city’s core, Ottawa is not only the nation’s capital, but also a notable technology center in Canada. With the tech industry representing a sizeable amount of economic activity in the city, Ottawa has become one of the most desirable locations for up-and-coming businesses looking to grow and expand their operations.
Accommodating a high concentration of businesses from the tech sector (specifically those specializing in telecommunications, software development and environmental technology), Ottawa has been nicknamed “Silicon Valley North.” Some of the biggest names in tech that set up shop in Ottawa include:
- Nortel
- Corel
- Mitel
- Cognos
- Halogen software
- Shopify
- JDS Uniphase
Ottawa’s thriving tech sector doesn’t fall short of expectations. In fact, other well-known corporations such as Nokia, 3M, Adobe Systems, Bell Canada, IBM, and Hewlett-Packard, have followed suit, opening noteable regional locations in the city as well.
If your business falls under one or more of these categories, and invests in thorough research and development efforts to advance and innovate your field, then you may be eligible to file a SR&ED (Scientific Research and Experimental Development) claim with the Canadian Government to earn generous tax incentives.
Not sure how? Our consultants from our SR&ED consulting firm in Ottawa will meet with you to screen your projects and determine your SR&ED eligibility through a thorough consult.
What exactly is the Scientific Research and Experimental Development (SR&ED) investment tax credit program?
The SR&ED program is the largest source of federal government support for research and development in Canada. Providing over $4 billion to over 18,000 claimants each year, the SR&ED program works to help partially cover eligible costs incurred by businesses in the tech sector. If your company focuses on progressing and innovating your industry’s work and technology, then you may be eligible to take advantage of generous SR&ED tax incentives offered by the Canadian Government.
When businesses successfully file a claim with the help of our SR&ED consultants, companies can recover anywhere between 15% to 41.5% of their eligible expenses–that means more funding for future research.
Though many Canadian businesses qualify for the SR&ED grant, only a percentage of companies submit a claim due to the additional upfront costs and hours of labour involved in the process. Luckily, our SR&ED consultants in Ottawa have the knowledge and experience to help take over and streamline the process.
With the help of our specialists from our SR&ED consulting firm, businesses owners don’t have to lift a finger when applying for their SR&ED grant. Beyond ensuring that your claim is accurately completed and successfully submitted, our SR&ED consultants will also work to help your business receive the best return possible.
When you work with our SR&ED consulting firm, you can expect our team to do the following:
- Provide a free, no obligation consultation to help you identify potential SR&ED opportunities
- Meet with you to screen your existing projects and determine your business’ eligibility for SR&ED
- Help you identify eligible SR&ED projects to ensure you maximize your SR&ED tax return
- Work with you and the information you give us to help you prepare a comprehensive technical report that details your experimental activity in depth
- Help you prepare all tax schedules and accounting reports (regarding project costs) to ensure a successful and competent SR&ED claim
- Help you submit your SR&ED claim to the CRA
- Provide ongoing support to your business when dealing with financial and technical reviews for SR&ED
- Provide on-demand SR&ED consultations for tailored SR&ED support and advice
Accumulate generous tax incentives for your business in Ottawa and recover costly business expenditures from the government when you invest in our reputable SR&ED consulting services.
Thanks to the SR&ED program, companies in the tech sector, like yours, receive research and development returns for expenses incurred through in-house research and experimentation.
What type of work qualifies for SR&ED tax credits?
According to the CRA, work that qualifies for the SR&ED must “advance the understanding of scientific relations or technologies, address scientific or technological uncertainty, and incorporate a systematic investigation by qualified personnel.”
More specifically, qualifying SR&ED work includes:
- Experimental development that achieves or aims to achieve technological advancement to create new materials, devices, products, or processes, or improves existing ones
- Applied research that advances the scientific knowledge of a specific practical application in view
- Basic research to advance scientific knowledge without a specific practical application in view
- Support work in engineering, design, operations research, mathematical analysis, computer programming, data collection, testing, or psychological research, but only if the work is commensurate with, and directly supports, the eligible experimental development, or applied or basic research
During your review with our SR&ED consultants, you will be asked to provide documented evidence that supports your research and development efforts. When you work with an experienced SR&ED consulting firm, your consultants will get to know your business and how it has operated in the past year to ensure that all areas of spending proof can be pulled from, maximizing your overall return.
The following documentation may be requested from your business:
- Project planning documents
- Experiment designs and plans
- Technical drawings
- Project records and lab notes
- Trial run records
- Process reports
- Protocol, data, results, analysis and conclusive documentation
- Media: photos/videos of eligible research and development efforts
- Purchase invoices and proof of payment
Prior to helping your business claim its expenditures, our SR&ED consulting firm will analyze and evaluate the following records to accurately calculate your business’ expenditures for the year:
- SR&ED salary or wages
- Money spent on materials for SR&ED
- Contract expenditures for SR&ED performed by a claimant
- SR&ED lease expenditures
- SR&ED overhead and other expenditures
- Third-party payments
- SR&ED capital expenditures
Beyond helping your business recover its eligible SR&ED expenditures a successful SR&ED claim carried out by our consultants can also offer monumental financial advantages.
On top of the SR&ED grant, a successful SR&ED claim will also present more opportunities to help your Ottawa based business save. For starters, a successful SR&ED claim will offer your business the following financial advantages including:
- Obtaining a full tax deduction – if your small to medium sized business engages in qualifying research and development efforts, you can obtain a full tax deduction for the expenditures incurred over the past year on top of the SR&ED grant from the government.
- Pooling qualifying expenses – when your small to medium sized business has successfully claimed its SR&ED credits, you’ll have the option to either receive them immediately, or alternatively, carry them over to the years following. Not only does this enable your small business to better budget its funds, pooling qualifying expenses will also lower your overall costs for research and development–ultimately, helping you save more.
- Receiving investment tax credits (ITCs) – Reduce the amount of income taxes that you pay dollar for dollar when you qualify to receive investment tax credits. Since ITCs can be obtained as cash refunds, you’ll be eligible to get money back from the government, even if the amount of credits you have exceeds the amount of money you owe in income taxes.