Common Questions on SR&ED and Government Grants
While we answer your questions below, we find it more efficient to have a short call in which we answer very specific questions related to your business. So, don’t hesitate to pick up the phone or email us. Our initial advice is always free.
What is SR&ED funding?
SR&ED is an innovation tax incentive to help companies defray the costs of developing new or improved products. Each year, over 20,000 companies in Canada file SR&ED tax credit claims. The average refund/tax credit for SMEs is $150,000. CRA administers the SR&ED program. While CRA audits and reviews SR&ED claims processes, RDP’s experience and its ICP program guarantee a successful outcome of CRA audits and reviews.
How can I be confident I'm claiming every SR&ED dollar I deserve?
RDP does not rest on the fact that we have provided SR&ED and grant consulting services for over 30 years. We constantly seek feedback from clients and seek new ways to improve our service. Our ICP program is our flagship platform. ICP has 3 objectives:RDP does not rest on the fact that we have provided SR&ED and grant consulting services for over 30 years. We constantly seek feedback from clients and seek new ways to improve our service. Our ICP program is our flagship platform. ICP has 3 objectives:
- Maximize our clients’ R&D tax credit claim
- Minimize our clients’ involvement in the process
- Support the claims to defend against CRA audits/reviews
How much money can I get back?
The amount of SR&ED tax credits depends on your corporate ownership structure and certain financial criteria. Federal refundable tax credits are available for Canadian-controlled private corporations (CCPCs) at a rate of 35%, upon meeting certain financial criteria. Federal, non-refundable tax credits are available to foreign-owned, publicly traded companies, and certain partnerships at a rate of 15%. Additional provincial tax credits are available in many provinces.
What type of work is eligible for SR&ED funding? I'm not sure we do R&D.
SR&ED eligibility is not limited to pure research. If your company has to overcome technological challenges while developing or improving new products and processes (in a systematic way), you could be eligible for SR&ED funding. These challenges may arise out of limitations or constraints with current processes, systems, cycle time, integration or scalability, to name a few. If you cannot find a solution to these challenges in the public domain or are using your current, internal knowledge base, this is where your SR&ED could begin.
When do I have to file the claim?
SR&ED claims are due 18 months following your fiscal year end. For example, companies with a year-end of December 31, 2018, must file their SR&ED claim by June 30, 2020. All required forms must be filed by this date in order to be considered for the credit. There are no exceptions. However, claims filed within 6 months of the fiscal year-end are processed faster by CRA.
What if I already receive some sort of government grant or funding?
Many companies apply for and receive funding from other government sources. With careful planning, businesses can take advantage of several available programs to maximize the funding they receive. For example, if you receive a grant for an R&D project, like IRAP, you can still make an SR&ED claim (which is essentially limited to the company’s contribution to the R&D project). RDP’s team of government grants and SR&ED tax credit specialists can work with you to ensure that you maximize your overall returns.
How do I apply?
It involves submitting SR&ED specified forms as part of your tax return or amended return. The claim itself consists of two parts:
- A technical description detailing your SR&ED projects
- Related financial information for which you are claiming credits
Government Grant FAQ
What is a government grant? How is it different from a tax credit?
A grant is a contribution of funds to a business from a government body and aimed at supporting the government’s target initiatives. These funds are provided as cash installments throughout the duration of a pre-approved project. They are generally non-repayable, but some may require repayment depending on the success of the project. There are two key differences between grants and tax credits.
- A government grant is awarded to future initiatives or to get a new project off the ground. Grants will not fund projects already completed or underway or reimburse expenses already paid.
- A grant is not an entitlement. Simply meeting eligibility requirements does not guarantee approval. Grant programs are restricted by application deadlines and fixed budgets, and may only approve a select number of applicants each year.
What type of grants are available?
Canada has hundreds of grant programs in operation to support a vast array of business initiatives. Based on government priorities, grant programs can be classified into five categories:
- Marketing and exporting
- Hiring and training
- Green energy/CleanTech
- Business expansion
Please visit our grants page or speak to one of our specialists for more information on the types of activities that qualify for these programs.
How do I know my business is eligible for government grants?
Every program has different eligibility criteria and regulations. Some programs are only available in certain geographic areas, or at specific times of the year. Others are limited to companies of a certain size or industry. Grants should not be seen as welfare for struggling businesses; your company’s financial health and stability are seriously taken into consideration.
It is crucial that you address how receiving the government grant will benefit the Canadian public and create spill-over effects in the Canadian economy.
RDP’s team of funding specialists can advise you on your eligibility. We can also look over your plans for the next 12 months to help you align them with available grant programs.
Are there grants that are sector agnostic?
Yes, there are. The following grants are sector agnostic:
Hiring, Training, Export Marketing, Industrial Research Assistance Program (IRAP), NSREC Alliance, and Strategic Innovation Fund (SIF).
How much money can I get from a grant?
Depending on the type of activity supported, incentives can range from a few thousand dollars to millions of dollars in funding. Grants typically cover a percentage of eligible project costs (between 15% and 75%), up to a fixed maximum amount.
How much time and effort are required to apply for a government grant?
Each program has a unique application process, the larger the grant, the more time it takes to go through the application process.
For smaller grants, there is generally only one application. For large grants, there is generally series of applications ranging from a statement of interest to a full application.
RDP recommends that you begin your search for funding at least 3 months in advance of your project kick-off. Our grant specialists can assist you with navigating the funding schemes. They compile documentation and prepare the necessary application forms to ensure that you get maximum return with minimum effort.
FAQ about How We Work
What services does RDP Offer?
Our professional services help businesses manage, process, and receive a full range of government funding available in Canada, USA, UK, Ireland, and The Netherlands.
How do you charge for your services?
RDP charges a fixed fee, per diem, or on a contingency basis. We are flexible on pricing and we can provide a quote on any basis, or as a combination.
What sets RDP apart from competition?
For over 30 years, RDP has been successfully helping clients access a wide range of government funding programs including tax credits, tax recovery, and grants. We have an outstanding record and thousands of satisfied clients. However, sales pitches are just that, we recommend you “test drive” us. That way you know exactly what you are really getting, not a sales pitch that doesn’t deliver.
Is confidentiality guaranteed?
We take the security of client data very seriously. We have procedures and training in place to prevent the loss of confidentiality. For over three decades, RDP has never had an issue with the confidentiality of client information.
Contact Us To Schedule An Appointment For A Free Assessment
Contact us to schedule an appointment for a Free Assessment. We can help determine your eligibility for tax credits and grants and share more information about innovation funding.