former CRA Auditor
25 years SR&ED experience
SR&ED claims approved
Scientific Research & Experimental Development (SR&ED)
is among the most attractive incentives in the world!
Canadian Controlled Private Corporations receive cheques from the Government of Canada equal to:
⅔ of qualifying salaries +
⅓ of payments to contractors +
1/5 of material costs
20,000 technology-based companies receive $5 billion every year from SR&ED.
Who can receive these SR&ED cheques?
Canadian Controlled Private Corporations.
They recover two-thirds of qualified salaries in most provinces; 65.554% in Ontario; 64,325% in BC; 54.25% in Alberta. They also recover 33.2% of contractor fees + 41.5% of costs of materials consumed.
The CRA does a terrible job of explaining how sweet SR&ED really is! The federal rate is 35% of salaries, but we'll add 55% for overhead. Most provinces contribute 10% more! BC companies receive (35%*90%+10%)*155% = 64.325% of salaries! The calculations and forms required in each province is different and complicated, especially in Ontario, and Alberta.
When will your SR&ED cheque arrive?
After your accountant prepares your T2 income tax return containing the technical and financial information you and I need to prepare. We can do this in less than one month.
What is your deadline?
CRA must receive your SR&ED claim within 18 months after the end of each fiscal period.
What do you need to do to qualify?
You must discover something new technically, and understand CRA’s jargon:
"Technological Uncertainties” are problems you can’t solve by applying existing knowledge; “Technological Advancements” are solutions, the new knowledge you discover.
Planning, design, data collection and testing.
Measuring and analysis
to test your hypotheses.
Progress reports, data from trials. Who did what, when?
You'll recover 33.2% of fees paid to contractors in your province, or 28% if located in another province.
You'll recover 41.5% of costs of materials "consumed".
Include up to 75% of your CEO's salary, if directly involved
SR&ED activities must be performed in Canada.
Your answers to these 5 questions must be "yes"
Q1: Was there a scientific or a technological uncertainty?
What problems did you encounter that couldn't be solved by applying knowledge generally-available in your field?
Q2: Did the effort involve formulating hypotheses specifically aimed at reducing
or eliminating that uncertainty?
How did you decide to resolve your problems?
Was the overall approach adopted consistent with a systematic investigation,
including formulating and testing the hypotheses by means of experiment or analysis?
We'll describe your systematic investigation.
Q4: Was the overall approach undertaken for the purpose of achieving a scientific or
What have you learned that you didn't initially understand?
As a result of your experiments, what do you know that your competitors don't?
Q5: Was a record of the hypotheses tested and the results kept as the work progressed?
The CRA expects timesheets showing hours your personnel worked and their activities.
Let me help you understand the CRA's viewpoint.
What'll happen if the CRA decides to audit your SR&ED claim?
You may wait 6-8 months for your SR&ED cheque to arrive!
First, your local Tax Centre will screen your SR&ED claim.
Together we will explain to the CRA why your activities qualify. I know hat they need to understand. Together we'll provide clear concise reasons why your activities qualify, so you receive your SR&ED cheques quickly.
The CRA will mail a letter asking for supporting documentation.
You and l will have prepared this, ready to upload it to the CRA's Business Account portal.
Two auditors will be assigned, and visit you 2 months later.
A Research & Technology Advisor will ask in-depth questions about your technology, and what you did. A Financial Reviewer will inspect your General Ledger to verify payments.
You'll wait 2 months waiting for the CRA to mail you another letter.
The CRA's auditors will time to make a decision, and explain reasons for adjustments they may propose. We can appeal within 30 days.
The CRA will mail your SR&ED cheque 2 months later.
After their manager signs off, your file will go to another department to check if you owe taxes, GST or payroll remittances. Only then will the CRA will mail your SR&ED cheque (or make a direct deposit).
Avoid an audit by relying on experience.
Why should you hire a SR&ED consultant?
Perhaps you're mystified by the CRA's academic requirements. Figuring out what the CRA requires is tedious. Better to get help and receive your SR&ED cheque quickly.
Don't waste your time
Understand the CRA's requirements.
Include all eligible expenses
Lots of companies miss some!
Use proven templates
The CRA has approved them.
Your SR&ED claim is more likely to be approved by the CRA.
Submit your SR&ED claims promptly
Track your team's time so we're ready to submit in just one month!
Be prepared for an audit
Relax, knowing your SR&ED claim will likely be approved.
My mission is to get your SR&ED claim approved by the CRA without hassles.
“Our SR&ED claim have been successful since 2001, every year, ...
only one cursory financial audit was a breeze and no technical audits!
Imagine increasing your revenue by 20% with little effort of your own. ”
Peter van Diepen, Naviform Consulting Research