Government tax credits are helpful for funding businesses. However, the traditional process of applying for tax credits has been perceived as tedious and demanding. It doesn’t have to be that way. By following the right guidelines, the application process will never be complex.
One of the most popular tax credit programs is SR&ED in Canada. The SR&ED tax credit grants incentives to Canadian and foreign-controlled companies that major in scientific and technical research operations. These companies create new technology processes and products while improving the existing ones. The program has benefited many companies, as newcomers keep increasing yearly.
Whether applying for SR&ED or other tax credits, remember to put all the appropriate documents together to avoid related inconveniences. Also, working alongside a mentor is always advised to eliminate any missing gaps throughout the process. The tips below will smooth your application, saving your precious time and strength for other business activities.
Let’s learn how to apply for government tax credits:
Table of Contents
Work with an Experienced Mentor
Working with a mentor has proven beneficial in many fields, including the tax credit application process. A mentor will guide you through the entire process, providing various helpful tips alongside those which would cost your claim negatively.
Choosing an experienced and reputable mentor can be challenging, especially with the current number of scammers in the industry. A reputable expert is characterized by bountiful positive reviews and testimonials from previous clients, plenty of referrals from other mentors and businesses, and their ratings or popularity in the SR&ED program.
Working with a mentor saves you plenty of time to be used elsewhere in the business while saving your hard-earned pennies from scavenger ‘mentors’ in the market. You can also request referrals from known contacts.
Work With a Reputable Consultant
Consulting may appear slightly similar to mentorship, although each approaches their clients differently, with varied purposes and areas of concentration. For instance, consulting will require less time than mentorship due to its straightforward nature.
On the other hand, mentorship requires more time to create a strong relationship and might cover different areas of life alongside the tax credit issues. An experienced and reputable consultant will hasten the claimant’s tax credit claim process while successfully assisting them in manoeuvring through the challenging stages.
Plenty of consultants in the market offer adequate services at an affordable price. Again, stay watchful of scandalous consultants who have intensified in the current economy. When the deal is too good, reconsider your decisions.
Communication Tracking Tools
Claiming for government incentives or tax credits is crucial with sensitive data, information, and other details. The process and means of communication between the claimant and the Canada Revenue Agency is the most sensitive branch of SR&ED claiming, requiring various communication tools over the common ones.
These tools protect and track the information sent and delivered. Some of these tools include;
Producteev: It is a communication tracking tool that performs timely updates on ongoing projects, making it easier for the claimant and the CRA to operate.
HipChat: Operates almost similar to the standard communication platforms, although it offers greater security information. The tool lets users chat privately, video call, or screen share.
Slack: Slack has gained massive popularity in businesses for its top-notch communication features. The collaboration-oriented software provides nearly all communication requirements from emails and direct messages.
Good Record Keeping
No matter what industry you have specialized in, record keeping can never go wrong. Record-keeping makes everything easier than thought, especially if it involves the need for invoices and other proofs of payment.
If you want to claim tax credits in the future, ensure to document all your tax receipts alongside other expenditures. Ensure to use the same documents for all software to avoid misunderstandings leading to the claim’s cancellation.
Note: No document is too minor to be recorded and filed, as you never know what information the Canada Revenue Agency might request.
Time-Tracking Your Progress
No business deserves to repeat the same process over and over in efforts to apply or benefit from the tax credit program, not forgetting how monotonous it can be. Therefore, financial and accounting experts designed ways, and tools businesses can use to monitor and track their time throughout the claim process. They include:
Toggle Track: Toggl enables businesses to track their time during the claim process for free with a single click. The tool also incorporates other time and project management software such as Trello and BaseCamp.
Harvest Tracker: The harvest time tracking tool for SR&ED claims provides answers to various questions a business would ask during and after the process.
TimeCamp: TimeCamp helps businesses to track their time through the claim process by use of keywords. It works alongside other project management tools, such as Trello and BaseCamp.
