Your SR&ED Claim on Steroids

What’s the biggest mistake that you as a business owner or manager can make when it comes to your annual SR&ED (Scientific Research and Experimental Development) tax credit claim?

That’s easy to answer: Failing to file the claim!

Each year, the federal government distributes a whopping $4 billion through SR&ED to Canadian companies to encourage domestic research and development.

By the way, in case you’re unaware of SR&ED, it is one of Canada’s most lucrative and accessible funding programs for business. No matter what size your company is and regardless of the sector you operate in, you could be eligible to receive a substantial tax refund.
So if failing to submit a claim could be your biggest mistake, what’s the next major slip-up you want to avoid?

The answer to this question is not nearly as obvious, but it, too, could have significant financial implications for your organization. I’m talking about what your company does with the detailed business and financial information that is generated as a by-product of the SR&ED technical review process.

During the investigation process, focus is brought to bear on new discoveries your company has made and competencies it has developed over the preceding year as a result of its R&D activities. These competencies often represent opportunities to be first-in-market with products or services and could lead to new customers, expanded sales and growth.

The key issue here surrounds the word “could.” How often, in fact, do businesses follow up and exploit these opportunities?

In our experience after more than 15 years of specializing in R&D tax credit claims, the answer is “not nearly often enough.” Within small to mid-sized companies in particular, the owners and senior executives are already stretched to the breaking point. Moreover, there are the many challenges and hurdles that accompany launching a new product or service, expanding into a new territory or going after a different type of customer.

In essence, the problem is one of business resources. Small and mid-sized companies have no shortage of actionable, competitive ideas. What they tend to lack are the supporting business competencies in everything from sales and marketing to legal and human resources.

In essence, the problem is one of business resources. Small and mid-sized companies have no shortage of actionable, competitive ideas. What they tend to lack are the supporting business competencies in everything from sales and marketing to legal and human resources.

As a solution, companies should align themselves with a proven business development specialist. You should be able to count on your business development partner to provide a surround of trusted, top-of-class business service providers from which you can pick and choose.
With these required resources close at hand, you will be in a position of strength as you set out to transform your R&D discoveries into revenue-generating success stories.

For more insight into unlocking the potential of your SR&ED claim, learn how FRED Group has structured its business development partner program.

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