Knowing the qualifying criteria is not enough to claim SE&ED benefits, but having knowledge and understanding about the SRED CRA guidelines will give a clear picture about the prospects of succeeding with the claim. Here are some of the salient features of the CRA guidelines that every company owner must take note of.
Determining the eligibility of your company
Whether your company’s activities come under the CRA guideline depends on the following:
Technological advancement – The activities in research and development must generate information that helps better understand the underlying technologies. Any product development or creation of a new process must amply demonstrate the technological advancement to become eligible for the SR&ED program. The aim should be to increase the technology level or base from where it belonged when beginning the experiment or development process.
Technological uncertainty – If your company faces technical problems or aspects that are yet unknown and impossible to overcome by applying the procedures, techniques, and data generally available to the competent professionals in the field.
Technical content – It is not advisable to undertake research and development activities at random to address the technological uncertainty but instead define the experimental work’s objectives or scientific research right initially, followed by rolling out the project. You must spell out the method of addressing technological or scientific uncertainty and obstacle through experimentation.
Research and Development – what it means in the SRED context
The definition of research development in the context of SRED is different from the traditional understanding of R&D. For SRED, research and development should revolve around technological advancement through a systematic approach to overcome the technical challenges or improve the technical deficiencies. It implies competition within the company for technical improvement that benefits the company or consumer. The SR&ED program considers the context of your company and the information available in the public domain. Bridging the gap of information in the public domain should be the motivation and starting point of your R&D campaign. Some legacy issues might create technological impediments, and working for overcoming it systematically will qualify your activity for the SR&ED program.
Projects that qualify
To qualify for SR&ED tax credits, the projects must cover some of the following aspects.
· Projects related to Experimental development lead to technological advancement to create new devices, materials, products, or processes or try to betterment existing ones.
· Research related to the advancement of scientific knowledge that aims at a specific application.
· Projects related to basic research for enriching scientific knowledge which might not have any imminent practical application.
SR&ED is an exacting system – the CRA is probably going to take a gander at your case and has a moderately high review rate. We need you to get your cash in a smooth cycle. If it’s not too much trouble ensure you completely comprehend the program’s prerequisites before you submit. This SR&ED guide will stroll through the means and kindly connect in the event that we can offer you a free counsel or guidance.
We’ll speak generally about new businesses and organizations in this guide in light of the fact that a large portion of our customers at F6S are CCPCs and companies.
Qualifying expenditures
From salaries to subcontractor cost and material costs, all of which have a direct relation to the SR&ED work, are eligible for including in the claim together with the overhead fee of 55% of salaries, which account for miscellaneous overhead cost and office expenses can form a part of your claim.
It might take between 6-12 months for settlement of the claim.
