SR&ED is a Government incentive
that reimburses Canadian companies for spending time and money on shop
floor experimentation activities
and R&D. Over $4 Billion funding was distributed to
businesses in 2008 alone!
For
each fiscal year a separate application needs to be made, with properly presented
technical and financial information.
Submitting the application on time is crucial - once the deadline is past, you will no longer be able to access the funding for that year.
When should I apply?
- Applications for SR&ED funding are made after a fiscal year is over.
- A professional SR&ED consultancy requires
one to two months to prepare your application.
- You have 18 months from the moment a fiscal year ended, to claim funding for that year.
What is your deadline?
Canadian corporations have the privilege of selecting their fiscal year end. For example, many retailers select their year end as July 31st.
Seasonal, summer businesses may choose Oct. 31st, etc’.
From a moment the fiscal year ended, the corporation has 18 months – a year and a half to submit the application.
For example:
Year end: July 31st, 2008
Deadline (18 months): January 31st, 2010.
Year end: August 31st, 2008
Deadline (18 months): February 28th 2010.
So what if I miss one year? I can always apply for the next?
Let’s take a look at a specific example to best understand the consequences of missing a deadline:
John is the owner of a small print shop, that in recent years have experimented a lot with its offset printers.
- Number of employees: 6
- Annual payroll expenditure: $200K
- Fiscal year end: July 31st
- With our help, John was able to qualify for SR&ED 25% of his payroll as eligible
for SR&ED reimbursement.
- 2008 refund: $50K Deadline to apply: January 31st, 2010.
- 2009 refund: $50K Deadline to apply: January 31st, 2010
- Total: $100K
Missing the deadline will cost John $50K in funding he won’t receive.
We met John in October 2009. At this point, both 2008 and 2009 fiscal years have ended. We had enough time to prepare the applications for
both years.
SR&ED is a wonderful incentive that any business should consider. It
is important to be aware of the deadlines, and allow your SR&ED consultancy at least a month before the deadline to successfully complete
the application.
Don’t postpone your SR&ED application,
and allow enough time for a consultant to become available and dedicated to your
organization.
Call (416) 548-8626 for an instant consultation or email us at info@taxrefundscanada.
About the author:
Nik Rostarchook is a business development associate with TaxRefundsCanada.ca (powered by TRIPOL Canada Inc)
Return to: SR&ED claims related articles
Revised:
December 10, 2009
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