Scientific research and experimental development (SR&ED) projects can lead to exciting technological advancements, but they can also be costly for businesses to undertake. Thanks to the Canadian government’s SR&ED tax incentive program, businesses have the chance to offset the cost of these projects.
Administered by the Canada Revenue Agency (CRA), the application process for the SR&ED tax incentive program is a lot of work. Companies have enough on their plates — especially if they’re conducting SR&ED work. Thankfully, there are experts that businesses and CFOs can turn to for help. SR&ED consultants are available to navigate the waters of the tax incentive program and help companies avoid leaving money on the table.
SR&ED consultants understand the Scientific Research and Experimental Development program in Canada and can use their expertise to enhance the chances of your claim’s success.
Whether you hire a tax consultant, a full-service SR&ED consulting firm, or another corporate tax specialist, having an expert in your corner improves your chances of getting a better SR&ED refund.
The Benefits of Hiring an SR&ED Consultant
SR&ED consultants provide strategic guidance to help you get the most out of the SR&ED program. They ensure everything is done according to the CRA’s standards and complete vital tasks required to successfully manage the tax incentive program.
Navigate the Complex Application Process
Filling out the SR&ED T661 form is a lengthy process. The CRA wants every aspect of your project thoroughly documented, from expenditures to the time spent working on it to any issues that came up along the way — which can take weeks (or even months). Most companies don’t have in-house teams with that kind of capacity to dedicate solely to the claim.
An SR&ED consultant can complete some or all of the application paperwork for you, depending on your needs. They gather everything in the project’s scope and make sure it’s properly organized and documented so it aligns with the program’s requirements.
The responsibility of your project’s eligibility for the program is also taken on by SR&ED consultants. This could potentially lend more credibility to your claim in the eyes of the Canada Revenue Agency because you had an expert involved.
Find Other Opportunities for Tax Credits
Not all research and development projects qualify for the SR&ED program, and, on the flip side, some projects you might not think qualify actually do. An SR&ED consultant helps you identify any qualifying projects to maximize your benefits through the SR&ED program.
This can be especially beneficial for startups that may not have a lot of capital set aside for these projects without sacrificing elsewhere in the company, like salaries. Ensuring you’re getting every tax credit and incentive possible can help newer companies recoup some of their investments.
Prepare for Canada Revenue Agency Audits
At any point, your organization could face an audit from the CRA. In fact, there’s a 25% chance your claim will be subject to a CRA review. The SR&ED tax credit program has higher audit rates compared to similar programs in other countries.
A consultant doesn’t necessarily prepare for an audit on behalf of your company or project. However, if an audit takes place, they can assist in the process by compiling all the necessary documentation.
SR&ED consultants can’t guarantee you won’t be audited, but having an expert prepare the claim for submission lessens the risk it will be flagged and helps ensure you hold onto your SR&ED credits.
How To Find the Best SR&ED Consultant
An informed choice will give you peace of mind. To find the right SR&ED consultant for your organization, look for key things in their background and body of work.
A Track Record of Submitted SR&ED Claims
Because the application process is so complex, a consultant with years of experience who’s proven they can get it done — and get it done right — is a green flag.
When looking for the right consultant, ask them how many times they’ve successfully filed SR&ED claims. Any experience is good, but if they’ve filed a significant number of them, that should inspire confidence that they could help you, too.
To further solidify trust in your choice, ask for references from previous clients they’ve worked with and helped submit claims for. Speak to the CFOs of those companies about their experiences with the SR&ED expert. Firsthand accounts from people in similar positions are an invaluable resource.
Deep Knowledge of the CRA
SR&ED consultants are familiar with the CRA and stay informed about ongoing updates to the agency’s programs and policies. You want a consultant who’s on top of any changes to the program and legislation so your claim meets the most recent updates and requirements.
When preparing claims, consultants know what to say — as well as what not to say. There are certain words and phrases that are more likely to be flagged by the CRA, and consultants can use their knowledge to get around the administrative red tape.
Having an expert consultant on your side also makes it less likely your claim will result in fraud accusations.
Experience in Defending Claims
While an audit-free experience can’t be guaranteed, a consultant with prior experience in defending claims to the CRA will benefit you.
SR&ED consultants know enough about the ins and outs of the CRA’s preferences and rules to ensure an audit will be more likely to result in a favorable outcome.
Maximize Your SR&ED Tax Credits With a Boast Consultant
Boast’s own AI-powered software platform BoastClaim SR&ED helps Canadian companies invest in innovation by maximizing their tax incentive claims for SR&ED projects. BoastClaim SR&ED takes your company’s data to find and organize eligible projects, time, and expenses for the SR&ED program. The software calculates as it goes, saving you time, money, and risk.
Get started today by requesting a free 1-hour consultation with one of Boast’s SR&ED experts.