R&D Tax Relief Case Study
CLIENTA manufacturing company that specializes in niche products (fans, heaters and mixers) approached RDP Associates Inc. (RDP) to defend an SR&ED funding claim that was denied by the CRA.
THE SITUATIONRDP reviewed the denied claim and CRA “30 day letter” informing the company that their application for SR&ED funding was denied. After gathering contemporaneous documentation, we drafted a detailed response to address CRA’s issues. When a Notice of Assessment (NOA) was received, RDP prepared and filed a formal appeal on behalf of the company.
THE CHALLENGEThe company had successfully prepared their own SR&ED claims for many years; however, a recent denial after a CRA onsite review led them to seek RDP’s expertise. In addition to defending their SR&ED projects, they also wanted us to prepare future claims as well as implement a system to efficiently document critical R&D information.
- RDP’s experienced SR&ED consultants worked with the company simultaneously to prepare claims for the following two years. Our team gathered documentation and evidence for the claim, rewriting project descriptions with a focus on observation and advancement, and determining all eligible R&ED expenditure.
- RDP also implemented an SR&ED screening system to simplify and expedite claim preparation and improve the claim defense.
- The following year, SR&ED funding claims were filed promptly. However, on account of the previous rejection, CRA again conducted a full onsite review which RDP was able to defend successfully.
THE RESOLUTIONRDP achieved several notable results for this client. Here are the most significant ones:
- After the onsite review, CRA accepted all the projects that were claimed for the following years based on the technical merits.
- 84% of all the qualified costs were accepted for the following years amounting to a total of $337,700.
- The following year, CRA reviews were completed in a much shorter time frame than the denied claim.
- The effort the company and its personnel have spent on the denied claim is more than double the time and effort involved in claim preparation for the following 2 years with audits factored in.
- The denied claim appeal is still in process with a strong evidentiary case.
- The company has received a very large increase in SR&ED funding in the 2 following years. They have accomplished this with less time and effort for their personnel and also implemented a system that makes their claims more reliable.
RDP’s extensive experience with government grants have resulted in a seamless claim preparation process that yields maximum benefits. We have outlined the main reasons for our effectiveness.
- Detailed approach: RDP’s peer-to-peer approach delves into the scientific work in more detail to fully understand what is being accomplished on a technology level.
- Scientific, technological and financial expertise: RDP’s experienced team of scientific and financial experts are second to none. We help dispels common myths regarding what qualifies as R&D for successful claim preparation.
- Maximum returns: RDP prepares thousands of claims a year. We understand all the nuances of the SR&ED funding program and ensure that every eligible project, activity and cost is claimed.
- CRA audit experience: RDP has dealt with the CRA on many occasions. There are many steps in an audit process that can cause delays or outright rejection that RDP can identify and avoid.
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