Navigating the SR&ED program

Emerging environmental companies, long on innovation but short on capital, have potential access to more than 150 government funding, incentive and rebate programs. The key, says consultant Fred Hausmann, is to navigate the maze of programs to ensure that these entrepreneurs receive the maximum possible support to advance their products or services and grow their firms.

Hausmann was one of the panelists at the last Growing Your Business seminar “Turning Research into Dollars” hosted by the Altitude Accelerator and OCETA.

FRED is particularly focused on obtaining the full range of tax credits available to companies through the Scientific Research and Experimental Development (SR&ED) tax incentive program. Administered by the Canada Revenue Agency (CRA), it is the largest single source of federal government support for industrial research and development. Companies can recoup up to 68% of eligible R&D expenditures.

In recent years, there have been some notable trends and changes in the SR&ED program, Hausmann observed. There has been an increase in the number of auditors and audits of applicant companies, and new application forms have been introduced, requiring briefer descriptions of the applicant’s product or technology and a more streamlined risk analysis outline.

At the same time, more supporting documentation is sought. This can be a challenge for smaller, entrepreneurial companies whose focus on innovation may leave little time for reams of paperwork.

Inadequate or incomplete documentation is often one of the main reasons a company’s SR&ED claim may be rejected by the CRA. Hausmann pointed out that the difficulties and setbacks encountered in developing or advancing innovative technologies, products or processes need to be as thoroughly documented as the successes. This will give the CRA a full picture of the R&D process and its prospects.

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Join us for Business Valuation – Busting the Myths: How do Investors Value Your Business at the  next Growing Your Business breakfast event series 7:30 a.m. to 10 a.m., Thursday April 14th at the University of Toronto Mississauga?s Faculty Club.

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