The number one piece of advice we give to our clients with respect to the Scientific Research and Experimental Development (SR&ED) program is to treat the Canada Revenue Agency (CRA) as a Customer. The reason for this is quite simple: Return on Investment. At the end of the year, the CRA will provide your company a return on your qualifying R&D investments through the SR&ED program. To get your return, you must undertake eligible activities, provide certain deliverables (i.e. T661) and maintain appropriate records. This is not unlike the activities an organization would undertake when completing work for a ‘regular’ client. As in any other case, your return greatly depends on the customer satisfaction. One area where this philosophy particularly applies is maintaining quality supporting documentation for your SR&ED activities. In the T4088-08e (Guide to the T661), the CRA states that contemporaneous documentation is the “best supporting evidence that you […]
Khalid Eidoo
A major piece of advice we regularly give to our clients is to get educated on the SR&ED program. More often than not, our clients respond by saying something like, “Isn’t that why we’ve hired you?” Our answer to that question is “Yes, however….”. “Yes” relates to the fact that MCN will handle the preparation and optimization of your SR&ED claim. The “however” relates to the optimization part of our services which among other things include educating client’s personnel on important aspects of the SR&ED program. Client education is an integral part of our philosophy of treating the CRA as a customer (see our earlier post at http://www.mobilecapital.net/sred-advice-treat-the-cra-like-a-customer/). Here are some areas where SR&ED education plays a vital role: 1. Empowering Employees – In our experience, empowering employees can lead to significant increases in SR&ED claims. One technique we employ to make this happen is our SR&ED seminars. These are 45-minute to 1-hour […]
We frequently encounter manufacturing companies that are significantly under claiming on their SR&ED tax credits. The biggest mistake we see is that many of these companies view their new product development efforts as the only area where SR&ED is occurring and forget to look at their manufacturing improvement efforts. The methodologies of effective manufacturing process improvement, such as the Deming cycle or Six Sigma, often satisfy the requirements of SR&ED eligibility. Companies are quite surprised at how this can SR&ED eligibility can impact the real cost of their improvement projects. Let’s look at an example: A manufacturing company uses a piece of equipment that has consumable wear inserts. During operation, these inserts are consumed (worn-out) and require monthly replacement. The company’s Manufacturing Engineer identifies a number of possible other materials or coatings designed to reduce the rate of wear on the insert but is uncertain how these other materials will […]