Annual Tax Credits for Your Business
Every business owner should be aware of this information. After all, who doesn’t want free cash from the government (especially annually)? Did you know the Canadian government offers businesses of all sizes free tax credits for R&D (Research & Development) claims? Canada has one of the most generous tax credit programs in the world called the “Scientific Research & Experimental Development Program,” also known as “SR&ED” or “SRED”.
Tax credits can apply to any business in Canada that meets the qualifying components, and this is particularly valuable for health and food businesses. For example, bakeries, manufacturers and producers of food and health products have the opportunity to receive money from the government for their work! And these are not one time tax credits that the government provides. It can translate to an annual pay out! If you do not file for these credits, you may be under claiming.
You may qualify for SR&ED tax credits if you do one or more of the following:
• Develop new products, recipes, and/or packaging
• Try to improve the shelf life and durability of your products
• Try to make your products more nutritious and more appetizing
• Try to improve the food safety of your products
• Produce samples for sensory evaluation
• Try to make your processes and products faster
• Try to make your products more consistent
• Have experienced challenges “scaling-up” production
• Try to reduce the environmental impact of your processes
• Try to reduce scrap rates
If your business meets the 3 qualifying components below, then it is worthwhile for you to click here and fill out the contact form so you can be put in touch with David Reti, our SR&ED Expert who can complete your application free of charge. He specializes in the health and food industries, and helps businesses apply for these tax credits.
And the best part? It’s totally free to apply. Our SR&ED expert does not get paid a penny until the business in question receives their monetary tax credit in full from the government. Then and only then, the SR&ED Expert is paid a commission based on the credit received. Here is some great information about SR&ED directly from the SR&ED Experts themselves!
What is SR&ED?
In a word: refund. In two: cash refund.
Seriously. The SR&ED program is a way for the government to support Canadian businesses by giving them a refundable tax credit for work they’ve done. What kind of work? Testing, experimenting and gaining new knowledge.
Many companies think they don’t qualify because they don’t do research.
But this isn’t a research grant.
Three key components to qualifying are that you must:
- Be a Canadian-controlled Private Corporation;
- Have a payroll;
- Use a production environment.
Still think you don’t qualify? Even computer programmers who are self-employed have successfully submitted claims for work they’ve done. And just about any business that has a product line or uses technology to generate a profit could submit a claim.
There’s more. Obviously. But if you haven’t submitted an SR&ED claim before, or think you might be able to claim more, it’s worth giving us a call.
What Qualifies as SR&ED?
SR&ED is a program by the Canadian government designed to promote innovation in Canadian companies. It provides an incentive to develop new ideas by rewarding work done with a refundable tax credit. But it’s not just research.
SR&ED is available to any Canadian company that uses technology to generate income. This could be anything from a computer programmer to a pressman in a print shop to a chef doing recipe or menu development. It’s all about the work done.
So what qualifies as “work done?” There are 3 elements for an SR&ED claim:
- A technical obstacle. When the company has to spend time figuring out how to do something they haven’t done before, this is when the SR&ED claim starts.
- Work done. This is testing, research, or experimentation done by the company to resolve the technical obstacle.
- Knowledge gained. Whether the problem gets resolved or not is irrelevant. What the company learned by doing the testing is what the SR&ED program is all about – even if what they learned is that “it can’t be done.”
How to Apply for SR&ED Tax Credits:
If you are interested in learning how you may benefit from SR&ED tax credits, please fill out the form on our “contact” page by clicking here, and David Reti, SR&ED Expert will contact you for a free consultation.