The SR&ED program’s gone through many different iterations in my 20 years in the industry, and I can say from experience it will get more difficult before it gets better.
Ottawa, ON (PRWEB) October 10, 2013
Disputed submissions are on the rise for the Scientific Research & Experimental Development (SR&ED) program. This federal tax incentive—which gives out $4 billion annually—is the largest form of government support for industrial research and development, particularly for small businesses.
Recent policy rewrites and staffing changes at the Canada Revenue Agency (CRA) have been cited as some of the reasons for the sharp increase in disputed SR&ED submissions, especially with regards to technical eligibility.
Firms that specialize in SR&ED services are reporting that companies who historically received their refunds without issue are suddenly experiencing significant delays; additionally, when their refunds do come through, it is often for lesser amounts than anticipated. These changes are prompting many consulting and accounting firms to discretely remove SR&ED consulting from their list of offerings.
"It’s an increasingly competitive market, which will see organizations either adapting or exiting the space,” says Ottawa Business Journal/Ottawa Chamber of Commerce Forty Under 40 winner Elizabeth Lance. Ms. Lance is the CEO of The InGenuity Group—an Ottawa-based firm that offers assistance and training related to SR&ED.
It is best to pursue the services of a professional SR&ED services firm, she says, because experts who specialize in SR&ED have years of experience in identifying eligible costs and building positive relationships with the CRA.
In response to the instability of the market, many companies are opting to train in-house staff using do-it-yourself resources that have recently come onto the market. The Comprehensive Guide to SR&ED is one such tool that can assist companies with both the basic and advanced aspects of a claim. It is an online guide that features step-by-step application instructions, plain-language explanations regarding project eligibility, and insights into the overall SR&ED process.
The website where the guide is hosted—SR&ED Education & Resources—is best known for providing helpful articles written by industry insiders that give advice and historical context regarding the tax incentive program.
Retired CRA Research and Technology Advisor Gilbert Lance—who began with the CRA in 1986, but left the government in 2005 to help companies in the private sector—indicated that this is a unique time in the history of the SR&ED program.
“Significant changes have been occurring in both policy and administration since 2008, the likes of which have not been seen since the mid-1990s," he said.
“The SR&ED program’s gone through many different iterations in my 20 years in the industry, and I can say from experience it will get more difficult before it gets better.”