The Research & Development Tax credits (R&D Tax Credits) are deep rooted within the manufacturing industry in Canada. The manufacturing sector is facing reduced profit margins due to the current economic conditions. However, given the competitive nature of this industry, leaders are constantly on the search for new ways to improve efficiency and provide better products for their customers. Innovation through experimentation, testing, and constant reiteration are essential for companies to stay competitive and maintain their profitability by keeping overall costs of production low, while still developing cutting-edge technology.
Top most manufacturing sectors that qualify for the R&D tax credits are:
- Machinery manufacture
- Food and beverage manufacture
- Tool and die
- Pulp and paper
- Metal Fabrication
- Injection Molding
- Plastics and Resins
The R&D Tax credits become integral to the overall process because they assist firms to forecast their risk assessment by incorporating returns (on investment) with the SR&ED recoveries.Through a process of systematic R&D, manufacturers are able to achieve enhancements to products, processes, materials and systems. These activities qualify for tax credits or cash refunds through the Scientific Research and Experimental Development (SR&ED) program. At SRJ Chartered Accountants in Toronto and Mississauga, we specialize in helping manufacturers maximize their SR&ED claims by uncovering eligible activities that are typically missed:
- Product/Equipment integration into existing resources
- Upgrading/downgrading software/IT systems
- Improvements to products/procedures to increase quality/quantity
- Custom products that require non routine engineering
- Waste reduction, cost control, product line improvements etc
The Research & Development tax credit is the single most generous tax incentive by the Canada Revenue Agency (CRA) in Ontario and Canada. Manufacturing companies that benefit from the SR&ED program recover significant amount of qualified expenditures. Many companies may experience vagueness and difficulty understanding the CRA requirements and policies surrounding the R&D tax incentives. Therefore, it is quite common for companies to face challenges in identifying and claiming the appropriate activities/expenditures, leading to under claiming what they may be entitled to. AT SRJ Chartered Accountants, rest assured our clients are assigned consultants specialized and experienced in the field of operation of the client’s corresponding industry. Our consultants are skilled in identifying unclear, commonly missed, vague, and under claimed activities, which leads to recovering fair entitlement of R&D credits.
The Ontario R&D Tax credits are quite lucrative for Manufacturing firms, as they assist firms to recover up to 71% of qualified expenditures (payroll, capital, contract expenditures etc). The recovery through R&D Tax credits ranges from 20% – 80% of qualified expenditures, depending upon the province of residence and type of claimable expenditures.
At SRJ Chartered Accountants, our objective is to identify all facets of qualified technical activities and corresponding expenditures, leading to a successful SR&ED Claim completion. Whether you are a start up corporation or experienced in filing SR&ED Claims, our experienced and professional consultants will minimize the disruption from your business operations. We have a proven history of delivering quality results using our approach and we have been able to establish a strong reputation with CRA.