Start-Ups and SR&ED Tax Credits

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.

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