About SRED/SR&ED

SRED/SR&ED stands for Scientific Research and Experimental Development. This is a Canadian government project that began in the 80s whose aim is to support corporates, people or partnerships that perform scientific research or experimental development. The tax incentive project is carried out by the Canada Revenue Agency (CRA) who insist that all claimants submit their documents 18 months after the active fiscal year. The percentage to be refunded depends on the taxable income. 

This article is aimed at enabling the reader understand more about the eligibility for SRED/SR&ED. It is important to note that any company, whether small or big, can benefit from this as long as it carries out scientific and technological research and development.  

Criteria for eligibility 

There are three criteria that will help you know whether you are eligible. They are: 

  • Technological uncertainty  this means that a solution is not readily available for the problem you are required to solve, hence, it requires in depth investigation. If the solution is obvious, then you are not eligible as it is not an uncertainty. 
  • Systematic investigation  the company must conduct a step by step investigation whose purpose is to solve the technological uncertainties. It is also important to record the steps involved. Conducting spontaneous research instead of following a procedure is not considered appropriate. This will make you ineligible.  
  • Achieve technological advancement  after trying out different measures, a company may find a solution or not. Failing to find a solution to a technological or scientific project will not disqualify your company.  You are still eligible as long as you can prove that after trying several systematic methods, the company failed to get a solution. 

Eligibility questions 

It is vital to identify whether one is eligible before filing the claim. Ask the following questions to identify whether you are eligible: 

  • While carrying out the project, did you experiment using different methods and were they recorded? 
  • Are the products being developed by the business scientific or technological in any way? 
  • During the process, were you certain of your ability to achieve the mission or even ways to accomplish it? 
  • Do you have proficiency in the scientific and technological field or was there assistance from a professional ? 
  • Were there any experiments involved in the attainment of your mission? 
  • Had your business learnt more about technology and science at the end of the project? 

Conclusion 

Before filing for SRED/SR&ED, it is very important to understand what it involves. This is the reason why engaging the services of a professional is a good idea, especially if you do not understand much about it or it is the very first time to file a complaint. While filing the claim, ensure all costs are included. Do not fail to include even the wages and this is why proper documentation is very important.  

The profitability of the company will be crucial in determining the amount to be paid. Credits to be given will also be highly dependent on the amount of money the company has used for research and experimental development consulting companies in Toronto .