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Using TimeControl for Research and Development Tax Credits

TimeControl Research and Development tax credits

Many organizations have financial obligations to track efforts spent on Research and Development in order to qualify for R&D Tax Credits. Many governments have some tax credits or other incentives for work which qualifies research and development expenses.

Tax credit programs are typically designed by governments to encourage organizations in their region to employ people to do innovation, to focus their energies on R&D activities and to encourage the long term benefits that are possible when an organization has created something new. Such programs exist in the USA, Canada, the UK, Australia, throughout the EU and in many other countries and jurisdictions.

An organization which wishes to take advantage of R&D tax credits must document their efforts in compliance with the particular government in question. There are typically two levels of verification or audit of the claim. The first level is technical. Did the work described, meet the standards for R&D work as defined in the tax law of that jurisdiction? The second level is financial. The financial audit is what we refer to at HMS as the "Triangle Audit. This verifications looks at three aspect of the financial records to a) ensure that the data matches or balances against the other two aspects and b) to ensure that the amounts described are in compliance with the tax requirements of that jurisdiction's tax law for R&D claims. These three aspects are: 1) Payroll/HR, 2) Timesheets and; 3) Project Management.

R and D triangle audit
Research and Development Triangle Audit

HMS has extensive experience with R&D tax claims thanks to the success of organizations who have used our TimeControl timesheet to track R&D claims.

TimeControl is easily configurable to be able to track the basic requirements for multiple tracking at the same time. Using TimeControl, timesheets can be collected from one place and the data supplied to HR, Payroll, Billing, Project Management and the reports from TimeControl can be created as part of the organization's R&D tax return.

TimeControl includes pre-defined links for popular project management tools such as Oracle-Primavera, Microsoft Project/Project Server/Project Online, BrightWork, ARES PRISM, Open Plan and others and also links to Finance systems such as Oracle EBS, SAP and Microsoft Dynamics.

You'll find in the resources we've listed here descriptions of how R&D tax credit programs work in different countries and how TimeControl's easy-to-use timesheet can be configured to meet the R&D tax credit reporting requirements.

To get a personalized demonstration of TimeControl or to speak to one of our TimeControl representatives about how TimeControl can be a part of your R&D tax claim process, please fill in an Information Request.

Online Resources

Here are some references that may be of interest to you that describe the R&D programs for different government jurisdictions

  • United-States Flag

    United States

    The IRS website at www.irs.gov contains extensive information on filing R&D tax returns. In particular, look for the Research Credit Claims Audit Techniques Guide which identifies the key elements of a successful R&D tax claim.

  • Canada Flag

    Canada

    Revenue Canada maintains extensive information on how to claim an R&D tax credit on its website at www.cra-arc.gc.ca. In particular, look for the SRED - Scientific Research and Experimental Development tax credit program.

  • Quebec Flag

    Quebec, Canada

    The Revenue Quebec website at www.revenu.gouv.qc.ca carries extensive information on how to benefit from and apply for the research credit.

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