SR&ED Filings in the time of Covid-19 - March 25
Dear Clients, Partners, and Friends;
These last few weeks have changed our society and economy. Events are unfolding daily and there is much uncertainty. I first and foremost hope you are taking care of yourself and your loved ones during this time and also hope you take care of your health and overall wellness.
The economic and social consequences from the Covid-19 pandemic are devastating and will be long lasting. We must all be responsible to our families, community and businesses and take actions now to re-mediate the effects.
ENTAX is here to support you. Our team is working tirelessly from our homes to prepare and file SR&ED claims to ensure your business gets the funding you need and deserve.
Over the past week, I’ve called many clients and gotten their feedback on what is taking place and the effect it is having on their business. The focus is on supporting employees and customers at this critical time. The focus is also on preserving cash, cash flow and liquidity in the short, medium and long term based on best, likely and worst case scenarios.
I’ve also had calls with CRA to understand what is taking place internally within their bureaucracy. From the SR&ED processing perspective, all CRA field activity such as First Time Claimant Meetings and Audits are halted at least until April 6. After then, we do not know what will happen. The CRA currently is in a state of flux with changing priorities and many resources diverted and occupied with the new CRA Benefit Program implementation announced by the Government. All CRA auditors on March 16 were directed to not come into the office but many employees do not have remote networking capabilities due to security considerations of the Agency. We have to assume the CRA will auto process and assess tax returns/claims as per usual but anything requiring human intervention will be slowed if not stalled altogether. Many CRA processing steps require in-person, paper-based, signatories and sign-offs. Without in-person and in-office staffing at the staff and manager level, it is unclear how SR&ED audits (reviews), review proposal letters, First Time Claimant Advisory Services (FTCAS) will take place in the near term. The entire CRA bureaucracy was not built for providing remote services and thus it will take significant time and resources to figure it out. We will continue to monitor the CRA processing of SR&ED claims and provide you with updates.
In relation to SR&ED claims and our businesses, we’ve looked at many scenarios and there appears to be only one clear finding: Control what you can control.
The only thing you can control now is how quickly you file your SR&ED claims and get the funds you deserve. Filing your SR&ED claim and earning the accompanying tax credits (in some cases cash refunds) opens the door to other options in your business; like SR&ED lending or factoring. The sooner you file your SR&ED claim, the sooner you can potentially receive the benefits.
Some of our clients continue to find success with lending against their SR&ED claims. Many of these lenders such as Espresso Capital, Easly and Venbridge we have worked with and are familiar with the high-quality of our claims and clients. If you require a personal introduction to any of them, I would be happy to assist you.
Here are some resources I’ve found helpful on government funding, business advice and economic assistance options in these times:
Business Self Assessment Tool from Granted Consulting: https://granted.ca/covid-19-business-self-assessment-tool/
Summary of Economic Measures by the Government of Canada: https://www.canada.ca/en/department-finance/economic-response-plan.html
Sell to the Government on critical medical supplies: https://buyandsell.gc.ca/forms/help-canada-combat-covid-19-submission-form
Here are the CRA Programs available to your business: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update.html
Here is some additional content on how to manage the crises with you teams and businesses:
- Vancouver Board of Trade Resources and Management Videos
- An Action Plan for Tech CFOs
- CoVid Business Readiness and Continuity Plan Slidedeck
If you have a SR&ED claim in progress, now is the time to accelerate your filing deadline and work with us and your accountants to give us what we need to file your SR&ED claim.
Please reach out to us and let us know how we can help you through this unprecedented time. Our team is available and working hard to get you the funds you deserve and need for your businesses.
I will continue to update this blog as events transpire.
Please be safe and be well.
Ryan Pernia on behalf of the ENTAX Team