Frequently Asked Questions
What can we get compensated for?
You can receive a refund for salaries, contracts for SR&ED work done on your behalf, payments to universities or to research institutes, materials, and overhead expenses.
What’s the hardest part?
Many SR&ED projects are denied due to weak evidence, not ineligibility. To win your claim, it is critical to present the evidence in the manner that the CRA asks for and expects. We help you do that, with our SmartKit.
What about next year?
We help you implement our SR&ED tracking system (part of the SmartKit), to make next year’s claim even easier.
How big is SR&ED?
The Scientific Research and Experimental Development (SR&ED) program provides over $4 billion to over 20,000 claimants each year, of which 75% are small businesses.
Who are your typical clients?
Typically, we deal with businesses in software, manufacturing, medical, and food & beverage. However, we’ve filed hundreds of claims, for a wide range of industries.
Why do people get bogged down preparing their SR&ED tax credit claim?
- Lack of planning – something that gets rushed during tax season
- SR&ED is not equal to R&D. Claimants are often too close to their products (it’s their baby!) and fail to objectively describe the critical aspects of SR&ED reporting.
- People are product-centric in their thinking/writing. SR&ED is not about features, it is about what you did to the technology as opposed to with the technology.
- Lack of strong processes to compile the technical story and project costing.
- You’re running a business! SRED work is often filed in the LATER bin.
What are the top reasons why claims fail?
- SR&ED report does not properly answer the 3 CRA questions:
i) was there scientific/technological uncertainty;
ii) was there systematic investigation;
iii) was there a scientific/technological advancement.
The report lacks clarity, doesn’t communicate the story well – the dots are not connected.
- Lack of supporting documents (technical and financial)
- Description is too product- and commercialization-centric, as opposed to technical. Or, the work sounds like routine development. The CRA wants you to make it very clear why research and experimentation was required.
- Costs claims not supported by events described. The technical activities in your SR&ED story needs to jive with the claimed cost. For example, if you claim $100,000 of material costs like plastic resin for injection moulding, you must emphasize in the work-done section that a lot of resin materials were tested or used in a process, etc. Otherwise? Red flag.
- In an audit, you don’t know how to justify your project in front of the CRA auditors with project-supporting documents, CRA policies and tax law.
How does Engineva price SR&ED engagements?
We offer 3 alternatives. For each, the complete Engineva package (claim preparation, tax filing and CRA audit support) is available.
- Risk-free: Many of our client agreements are success-based – we don’t get paid until you do.
- Flat rate: Some clients prefer flat-rate.
- Hybrid: A combination of the above two options.
Why is it a bad idea to use percentages to estimate the amount of SR&ED work?
Many SR&ED preparers use percentages on your claim, e.g. 30% of all Mark’s work was for SR&ED. While it seems easier at the time, it can raise a red flag, and it is very difficult to defend in the event of an audit. There are better ways – connect with us if you’d like to know more.
Check if you are eligible with our SR&ED tax credit program
See frequently asked questions by our clients
Learn more about the SR&ED program