Canada’s Scientific Research and Experimental Development (SR&ED) program offers valuable tax incentives to businesses engaged in research and development (R&D) activities. As the federal government’s largest incentive for R&D and innovation, SR&ED can be a beneficial program for your funding.
In order to receive the best return, knowing how to file accurately is crucial. The program can be complex to navigate, and while self-filing is possible, many businesses prefer to rely on the help of an experienced consultancy instead. As dedicated experts in the SR&ED world, consultants will know exactly how to present your project for success and also help to prepare you to defend your claim in the case of a CRA review. While avoiding reviews entirely remains highly improbable (it’s far more likely to expect to be audited eventually), working with a consultant can certainly help reduce the chance of a review due to glaring errors or omissions.
Below, we’ll take a look at some of the key ways a consultant can help businesses avoid reviews, as well as the benefits of partnering with an SR&ED financing partner like Venbridge.
Expert Knowledge of SR&ED Guidelines
One of the predominant reasons businesses partner with SR&ED consultants is the fact that specialized consultants have a deep understanding of SR&ED guidelines. There are intricacies and nuances to the SR&ED program, and knowing each little detail is key to ensuring you receive the best refund possible. A consultant will know how to tailor your filing to incorporate all eligible expenditures and will significantly reduce the chance of errors that could trigger a CRA review.
Thorough Documentation
Documentation is paramount when it comes to claiming SR&ED credits and avoiding a CRA review. Poor documentation is one of the top reasons filings get reviewed; SR&ED consultants are experienced in guiding businesses on the proper documentation practices required for successful claims. With expert knowledge of legislation (more on that below), requirements, and other core details, consultants are able to ensure that your level of documentation not only supports your claim but also demonstrates your commitment to transparency and compliance, reducing the likelihood of a review.
Accurate Project Planning
Effective project planning is crucial in demonstrating how your R&D activities align with SR&ED requirements. SR&ED consultants work alongside your team to develop clear project plans that align with program guidelines and help define project objectives, milestones, and experimental plans. These finessed details remove ambiguity from your claim and ensure your activities are well-structured and meet the criteria for SR&ED eligibility. Accurate project planning can significantly reduce the chances of issues if you’re subjected to a CRA review.
SR&ED consultants also have a keen eye for identifying potential red flags that could trigger a CRA review and regularly review your R&D activities and expenditures to spot any inconsistencies or irregularities that may raise questions during the claim assessment process. By addressing these issues before filing your claim, consultants help minimize the risk of a review and increase the likelihood of a successful claim.
Communication with CRA
In certain cases, communication with the CRA may be necessary to clarify aspects of your SR&ED claim. SR&ED consultants are skilled intermediaries between your business and the CRA and will assist with navigating all clarification requests to avoid mishaps or unnecessary confusion. In the case that your filing does trigger an audit (remember, almost all filers will be audited eventually), your consultant will be able to guide you through the review process and ensure you have everything you need to resolve things quickly and effectively.
SR&ED Financing with Venbridge
At Venbridge, we know that companies involved in R&D require working capital to keep their innovations on track. Our team provides reliable SR&ED financing solutions, enabling you to bridge the funding gap and confidently move forward. We proudly partner with clients across various industries across Canada, including clean technologies, artificial intelligence, biotechnology and pharmaceuticals, energy and natural resources, and more.
Contact our team today to discover how we can partner with your team to enhance your R&D initiatives by financing your SR&ED credits.
