Can you believe it’s that time of the year again?
As the cold draws in, many businesses will be nearing their accounting year-end and, although there isn’t an immediate rush to file your tax return, it’s best to get it done sooner rather than later.
That’s good advice for your main return but it’s arguably even more important for the SR&ED claim you want to include with it.
Many businesses don’t make a SR&ED claim when they first file their corporate T2 tax return. Companies have six months from their year end to do this but they’ve got an extra 12 months on top of that to file an amended T2 with their SR&ED claim.
Many businesses take the full 18 months but there’s no tax or financial benefit to doing this — quite the opposite.
We recommend SR&ED claims are done alongside the first T2 submission because, in our experience, the speed of service and response from the CRA is superior than it is for amended submissions. This means your SR&ED claim will be processed faster and you will receive the Investment Tax Credits (ITC) sooner.
The faster processing and interrogation of each claim made with the main T2 submission is down to the fact that many businesses do leave it to the last minute to file their SR&ED claim.
A very high proportion of companies will have a December year end. This results in quite a crush when the first T2 and SR&ED deadlines arrive six months and 18 months later. They all end up making their SR&ED claims at the same time. CRA staff simply have their hands full.
If you’re organised, you stand to gain by beating the rush. There are other advantages too. Waiting another year means it can be even harder to recall essential information and retrieve evidence.
Lastly, don’t underestimate how complex and time-consuming SR&ED claims can be. You have to be prepared to undergo significant correspondence with the CRA to demonstrate the claim is eligible. If you’ve never claimed before, the sooner you contact us the better.
For more information about the tax incentives available to your business, as well as information on the claims process, you can reach Richard Hoy at Richard.Hoy@catax.com.