On Feb 19, Jeff Christie delivered a webinar on the Do's and Don'ts of Claiming the Scientific Research & Experimental Development (SR&ED) tax credit. Here are the slides from the presentation.

1. THE DO’s AND
DON’T’s OF
CLAIMING SR&ED
TAX CREDITS
Webinar Presented by Jeff Christie, Partner, Boast Capital

2. WEBINAR OUTLINE
§ Do I qualify?
§ What can I claim?
§ How do I calculate my potential return?
§ What do I have to document?
§ How does the CRA Review claims?
§ How long does it take to process my claim?
§ What should I consider when claiming? (The Do’s)
§ What should I avoid? (The Don’t’s)
§ I’m ready to claim. Now what?

3. WHAT IS SR&ED?

4. APPLICABLE INDUSTRIES

5. QUALIFYING CRITERIA
Must meet three criteria to qualify for SR&ED:

6. ELIGIBILITY
The CRA’s 5 questions:
1. Was there a scientific or a technological
uncertainty that could not be removed by
standard practice/engineering?
2. Did the effort involve formulating a hypothesis
specifically aimed at reducing or eliminating the
uncertainty?
Continued…

7. ELIGIBILITY
3. Was the adopted procedure consistent with the
total discipline of the scientific method,
including formulating, testing, and modifying the
hypothesis?
4. Did the process result in a scientific or
technological advancement?
5. Was a record of the hypothesis tested and
results kept as the work progressed?

8. WHO QUALIFIES?

9. SR&ED BENEFITS
Return rates for SME CCPCs:

10. SR&ED BENEFITS
Return rates for non-CCPCs:

11. CALCULATING ITCs

12. CASE STUDY
§ SME software company
in Vancouver (considered
a CCPC)
§ 4 developers (1 front-end,
3 back-end)
§ Salaries are $75K per
year and 75% of time is
eligible

13. CASE STUDY
§ Front end development not typically eligible
§ Eligible expenditure pool for salaries would be $169K
($75K x 3 x 75%)
§ Proxy overhead method and CCPC rates of return
§ ≅$109K worth of investment tax credits (ITCs)

14. USING SR&ED TO GROW
Since it’s an SME, ~109K of ITCs = $109K Cash
That’s $327K of ITCs
generated over 3 years
if the R&D expenses
remain the same.

15. DOCUMENTATION
§ Documented at the time the work was completed
§ Technical obstacles or challenges
§ Dated

16. WHAT TO DOCUMENT?
§ Technical
§ Time Tracking
§ Financial

17. WHEN TO CLAIM?
18 Months Past Fiscal Year End
§ Current Claim = Within 6 mo
§ Amended Claim = Within 7 to 18 mo

18. TURNAROUND TIMES
From receipt of a complete claim:
§ CCPC Current Claim – 4 months
§ CCPC Amended Claim – 8 months
§ Non-CCPC Claim – 12 months

19. CRA REVIEWS
CRA Review ≠ Tax Audit
Multiple types of Reviews:
§ Desktop
§ Financial
§ Technical & Financial
§ First Time Claimant Advisory Service (FTCAS)

20. THE DO’s
Do:
§ Pay yourself and staff
§ Start time tracking and proper
documentation now
§ Incorporate your company and
ensure clear IP ownership

21. THE DON’T’S
Don’t:
§ Underestimate the importance
of documentation
§ Focus on the business
opportunity
§ Leave your SR&ED claim until
the last minute

22. READY TO CLAIM?

23. WHO IS BOAST CAPITAL?
We are:
§ Highly reputable
§ Technology-
focused
§ Efficient
§ Well-connected

25. JEFF CHRISTIE
PARTNER
403 589 2809 | jchristie@boastcapital.com
BoastCapital.com | @BoastCapital | @ChristieLuge
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