According to Craig Mulcahy, a Partner at BDO, Startups should investigate SR&ED because it is a good Year 2 cash flow tool for them- however, just because you make an app doesn’t mean that you are eligible for SR&ED tax credits. To avoid problems, it is recommended that start-up companies abide by the following guidelines.
1. Plan ahead- go through the CRA assessment tool and talk to CRA to get a quick assessment of whether you should apply. Ask an accountant or SR&ED specialist for a free consultation to see if it is worth proceeding.
2. Be realistic- be modest in your expectations; if your budget requires SR&ED funding to pay full-time staff, you may have problems.
3. Ensure that documentation is available- Learn about the documentation CRA requires and make sure you produce it throughout the year.