How to maximize an SR&ED Claim?
A senior SR&ED consultant can pin point research and development and supporting activities where expenditures were missed or requirements for the R&D tax credit program were misunderstood. We have seen instances where baseline salary calculations used numbers that were below the allowable limit of Canada Revenue Agency (CRA) and other events where supporting activities were not included to maximize the SR&ED claim.
In essence, an SRED claimant with not enough filing experience does not possess the same level of experience and competence in determining the maximum amount of return. This is especially true if SR&ED applicant has not participated in an CRA audit(s). This level of seniority, as with any industry can only be obtained through experience and expertise. In some instances the SR&ED claim sizes have more than doubled due to a fundamental misinterpretation of the eligibility requirement.
Time management of internal resources is helpful when applied effectively for a maximum SRED refund. The SR&ED claiming process depends on an in-depth grasp of the CRA SR&ED claim and auditing procedure. In the event of an SR&ED audit, an SR&ED consultant develops a full understanding of the SRED claim project objective and appropriate supporting documentation that is required to back up and successfully defend a R&D tax credit claim. The benefit of employing senior SR&ED consultants is the volume of SRED history and exposure to the CRA SRED audit process to understand and know where the optimal amount of time and resource allocation are.
New SRED claimants may spend more time with record keeping and documentation processes to support the SR&ED submission or on the other hand there may be a lack of documentation to support the SR&ED claim.
Tips and tricks to Maximizing Your SR&ED Refund
- Increase your SR&ED program knowledge with familiarizing yourself with the SRED guide and SR&ED requirements to maximize your understanding of research and development tax credit program. That program knowledge may assist in helping your company become engaged and bid on certain projects that have a likelihood to being SR&ED eligible. A good time tracking of your SR&ED project labor or all those involved in the project(s) is a must.
- In real estate, you may have heard the term “Location, Location, Location”. In SR and ED, we like to use the term “Documentation, Documentation, Documentation”. Keeping track of activities that relate to technological advancements or technological uncertainties are crucial for filing an SRED claim
- Maximize efforts and initiatives to overcome the technological challenge and focus on “Why” it is a technological uncertainty rather than “What” the technological is.
- Make sure that documentation to the SR&ED claim is contemporaneous. There are many programs to keep track of your activities, such as ‘Meeting Minutes’ or other open source software.
About CTAP SRED
CTAP is a tax credit firm specialized in helping technology companies with a number of government incentive programs such as SR&ED (Scientific Research and Experimental Development) and OIDMTC (Ontario Interactive Digital Media Tax Credit). Our consultants are software and hardware technology experts with in-depth knowledge of the incentive programs’ requirements. As such, we are in best position to determine your eligibility and presenting your submission. CTAP will help you to focus on your core business while we take care of the complex requirements of this program and maximizing refund. Best of all CTAP is compensated only when your company receives the credit(s).