To prevent any potential problems or audits, it is essential to make sure that your SR&ED claim complies with all applicable tax agencies’ laws. To achieve compliance, an SR&ED consultant should conduct the following actions:
In-Depth Evaluation: To ascertain your company’s eligibility for SR&ED tax credits, the consultant should analyze your company’s research and development operations in depth. Understanding your initiatives, technical difficulties, and the level of technological breakthroughs are all part of this assessment.
Knowledge of SR&ED Guidelines: The consultant must be thoroughly aware of the requirements for eligibility set forth by the tax authorities for the SR&ED program. This information is useful in determining qualifying R&D activities and related costs.
Technical Meetings and Onsite Visits: To acquire a deeper understanding of the work carried out, the consultant may interview important technical personnel participating in the R&D projects. Site visits may also be made to inspect the R&D facilities and procedures.
Project Eligibility Determination: The consultant will decide which projects or activities meet the requirements for SR&ED tax credits based on the information received.
Claim Preparation: Each qualified project must be clearly shown to meet the standards of the SR&ED program as the consultant prepares the SR&ED claim with correct and comprehensive information. They will guarantee that the claim adheres to the regulations set forth by the tax authorities.
Avoiding Overstatements: The consultant should take care not to exaggerate the R&D activities or expenditure in the claim in order to prevent compliance difficulties.
Retention of Records: Preserving all pertinent records and documentation pertaining to the SR&ED claim is crucial. Your business should get advice from the expert on the necessary record-keeping procedures to back up the claim in the case of an audit.
Risk Reduction: The consultant needs to take precautions to reduce any potential red flags that could start an audit. This entails making sure that the claim is accurate, properly supported, and in line with the business’s financial statements.
Audit assistance: If the tax authorities decide to look into your SR&ED claim, a professional SR&ED consultant will provide audit help. They must be prepared to offer justifications, proof, and any other paperwork needed for the audit.
You can considerably raise the likelihood of a successful and compliant SR&ED claim by following these steps and engaging with an expert SR&ED consultant who is knowledgeable about the tax authorities’ laws.