Tax Tip - Advisory for businesses claiming SR ED investment tax credits

Have you or your business been approached by a third party offering to apply for Scientific Research and Experimental Development (SR&ED) tax incentives on your behalf? The Canada Revenue Agency (CRA) has observed a recent increase in SR&ED claims containing false and/or non-compliant information.  The CRA is advising you to be cautious if you receive an unsolicited offer to help you claim SR&ED investment tax credits.

The CRA is here to help you

The SR&ED Tax Incentive Program is the largest Government of Canada program supporting research and development (R&D) in Canada, providing more than $3 billion in tax incentives to over 16,000 businesses annually.

The CRA is committed to making it easy for all eligible businesses to access the SR&ED investment tax credits to which they are entitled. We are re-designing our web pages and updating our services and tools to make it easier for you to find out whether your work qualifies for SR&ED tax incentives.

If you have been approached by a third party telling you that your business is eligible to claim SR&ED investment tax credits and offering to complete a claim on your behalf, the CRA recommends that you take the following steps before proceeding:

• Check to see whether the R&D work your business is doing qualifies for SR&ED tax incentives by consulting the Find out if you can claim the SR&ED investment tax credit web page.
• Use the CRA’s interactive SR&ED Self-Assessment and Learning Tool to find out in about 30 minutes whether your work is likely to qualify and to calculate your potential claim amount.
• Request a free telephone consultation with a SR&ED specialist if you have questions about whether your work is eligible or how to submit a claim.

If you have questions or need more information, contact us.

Tips to protect yourself

Here are some additional ways to protect yourself and your business:

• Always make sure to consult the official Government of Canada website for SR&ED tax incentives to receive the most up-to-date and accurate information.
• Be wary of individuals who try to convince you to file a claim when your business is not actively conducting R&D work.
• Be informed about who you are dealing with and what their qualifications are.
• If you decide to use a third party to assist you with your claim, remember that it’s your responsibility to verify the accuracy of the information being submitted on your behalf and to keep documentation to support any claim you make.
• Never sign a blank form and always ask for a copy of your application for your records.

You will be held liable for any false information, and may face serious consequences.

Again, if in doubt, contact us. We’re here to help!

What if you discover an error in your submitted claim?

Submitting an SR&ED claim to the CRA is a serious undertaking and all claimants are legally responsible for the accuracy of the information in their claims. That said, we understand that inadvertent errors or omissions can sometimes occur. If this happens, contact the CRA’s SR&ED Tax Incentive Program to discuss your situation.

In addition, the CRA encourages taxpayers to come forward and correct their tax affairs through the Voluntary Disclosures Program (VDP). The VDP grants relief on a case-by-case basis to those who voluntarily come forward to fix errors or omissions in their tax filings before the CRA knows or contacts them about these errors or omissions. Visit the VDP web page for more information.

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SOURCE Canada Revenue Agency