PH Farmer Consulting Ltd: Let’s talk SR&ED

It’s not every day that you come across a successful and supportive agency that provides integral taxation and management account services. As luck would have it, PH Farmer Consulting Ltd. has been doing just that (and more) since opening its doors in 2002! Founder and President, Paul Farmer, was inspired to start this business after spending the 90’s working at the Canada Revenue Agency and witnessing firsthand the difficulties many claimants had, due to confusion and lack of understanding about the Scientific Research and Experimental Development (SR&ED) tax credit program’s eligibility criteria. Using his years of experience reviewing SR&ED claims, Paul knew he could help fill in the blanks and provide guidance to identify more eligible projects and improve the preparation of the required project descriptions, expenditures, and calculations. Leaving CRA after obtaining a CMA designation, Paul joined Deloitte’s Halifax Tax team, gained more experience preparing income tax returns, SR&ED claims, and even took CICA In-Depth Income Tax courses. Paul feels the unique knowledge and experience gained from working on “both sides of the fence” better equipped him for his next venture - the founding of the company we recognize today. So, what inspired Paul to pursue tax and management accounting in the first place? According to him, it wasn’t what he originally envisioned for himself. However, after graduating with a Bachelor of Commerce in Marketing from Saint Mary’s University, Paul quickly realized the value of strong accounting, forecasting, budgeting, & tax preparation skills when running a business. This epiphany led to Paul taking all the accounting courses he missed originally while attending SMU during his employment at CRA. Except he had to do it the hard way, through evening and summer classes while still working full time.

“The knowledge and insights gained working in private industry, at CRA, and Deloitte, plus seeing the outcomes that resulted from both well/poorly planned and executed actions, reinforced to me how important it was to take the time and effort to research and “crunch the numbers” BEFORE you act.” Paul Farmer, President and Founder of PH Farmer Consulting Ltd.

Growing up in an entrepreneurial family, and starting 2 businesses, also provided Paul with a clear understanding of the significant challenges, competing demands, and resource limitations that many SMEs struggle with. As a result, PH Farmer’s vision focuses on helping clients achieve the greatest overall success possible. The goal is to streamline the preparation process, claim the maximum amount of eligible expense, and enable rapid processing/issuance of tax credit refunds, which can then be used to fund future R&D activities and expansion. A great advantage PH Farmer has as a boutique consulting company is the flexibility to offer their services directly to claimants or as a “value-added service” available to clients of small and medium-sized accounting firms. While an hourly fee option is available, most clients prefer to pay under a Contingency fee model (based on a % of tax credits approved). During engagements, the PH Farmer team usually spends time educating the client’s key staff about the SR&ED program and typically claimable projects, activities and expenses for their industry sector. This knowledge transfer often increases the number of “potentially eligible” projects and activities identified for further and evaluation – resulting in additional expenses/tax credits. The education and guidance activities also extend to the preparation of the project description(s). The goal is to submit high quality claims, which minimizes the time and effort required after submission on claim defense/support, by providing the information required by CRA in the original filing. So, exactly how does the SR&ED program seek to fuel growth and create more high-tech jobs? For one, it is the largest R&D support program offered in Canada. It supports companies undertaking Basic and Applied Scientific Research, seeking to advance the existing Scientific Knowledge Base. It also is designed to encourage and support companies undertaking Experimental Development, seeking to create new or improved products, devices, materials and processes.

“The goal of the program is to accelerate economic growth and encourage the creation of high value engineering/technology jobs, knowledge and skills within Canada. As such, the Federal Government and most Provincial Governments (including Nova Scotia) provide tax credits to businesses conducting eligible SR&ED activities and incurring eligible expenses.” - Paul Farmer, President & Founder

The beauty of the SR&ED program is that whether or not the project succeeds does not impact eligibility for the tax credits, so long as the work was undertaken as part of an attempt to resolve/overcome significant Scientific/Technological knowledge gaps, barriers, and limitations in an effort to achieve a Scientific/Technological Advancement. PH Farmer is an impressive and inspiring organization seeking to help companies undertaking R&D achieve their goals, survive, and grow. They currently offer a complimentary initial eligibility assessment, to discuss a company’s recent, current, or planned R&D activities, to evaluate whether there appears to be potential eligibility and sufficient claimable expenses. Congratulations to PH Farmer for celebrating their 20th anniversary on August 30th, 2022!