5 things to know about Canada’s innovation tax incentives
This year’s global pandemic has shaken industries all over the world — but many companies don’t realise they are owed tens of thousands of government dollars for past innovations. Here, Richard Hoy gives you the Top 5 things you need to know about Scientific Research & Experimental Development tax incentives (SR&ED):
1) If your business has created inventions, innovations, products and processes that didn’t work — don’t worry! It can still qualify for SR&ED, you just need to have kept good records of expenditure.
2) You can claim back 35 percent of qualifying R&D expenditures, up to a maximum of $3 million in each tax year, on qualifying products. The incentive is worth 15 percent of expenses above that amount.
3) You don’t have to be doing something totally new. Even improvements to existing innovations qualify for the SR&ED incentive. That will probably reduce the tax benefit but it also means much more of your work could qualify.
4) All too often, innovation is seen as the preserve of science and technology firms. However, it’s not all about test tubes and lab coats. Every sector can claim and we are seeing more claims than ever in the fields of construction, farming and transport — even Canada’s wineries are claiming more than ever.
5) Staff salaries DO count but that’s not all. Even contractor staff costs associated with third party firms that are helping you make your advances qualify as well.