SR&ED consultants are part and parcel of Canada’s tax infrastructure because companies rely on the consultants’ expertise to file their claim for SR&ED programs, the flagship program of the Canadian Revenue Agency that disburse about $3 billion every year towards it. The filing of an SR&ED claim is part of the income tax system governed by the laws that only the consultants can correctly interpret. SR&ED Consulting is a flourishing business for professionals who are experts in the field as they charge a percentage fee contingent on the claim’s successful realization.
Consider the stakes
Filing a claim by companies all on their own to save the cost of hiring a consultant that can be quite expensive at times is indeed a feasible option, but it leaves a lot to chance about a successful refund of tax or earning tax credits and grants. A consultant’s charges can dent the returns because paying a fee of $2,000 to earn a tax credit worth $10,000 might seem too much. However, if you consider a scenario where the stakes are as high as making $200 000 by way of claims under the SR&ED program, you would not mind paying $40,000 to the consultant. The claim’s size is a determinant factor to decide if it makes good sense to hire an SR&ED consultant.
Your outlook of business matters most
It will be wrong to presume that hiring an SR&ED consultant means that companies can shove off their responsibilities and rely entirely on the consultant to get things done. Since it is your claim, you must stay attached and work alongside the consultant to see that everything goes well. Since SR&ED programs generate a revenue stream, companies that look upon it as another vital revenue-generating unit are the ones that derive the maximum benefit from it. Such companies devote significant time and other resources to engage with their consultant round the year. They closely track the progress and monitor various aspects of the project from documentation to the financials so that they are ready to file the claim soon at the year-end.
Be careful in allocating your money
The Canadian government is overtly careful in allocating the tax money you have earned with a lot of hard work, and you must have the same attitude towards it. Filing the claim correctly with the help of a consultant or advisor needs your involvement in the careful compilation of data with ample documentary support and systematic evidence to prove the technical benefits. A qualified advisor is competent enough to defend your claim during the CRA scientific audit that provides some good experiences and makes you smile when you see your claim providing the desired dividends.
Despite following the standard practices regarding SR&ED programs, the consultant’s innovativeness and access to cutting edge tools and resources can make a lot of difference in the outcome. The consultant writes the report like an essay and ensures that you are following scientific methods throughout the year that help to provide systematic evidence, which is critical to winning the claim.
