SR&ED In The Manufacturing Sector

Changing consumer needs and expectations, new domestic and international trade entrants into your market, increasingly demanding industry standards, continuous price point pressures and numerous other factors contribute to an ongoing requirement for invention, innovation and technological advancement to keep pace in this dynamic, demanding and ever changing marketplace. 

Competitive advantage doesn’t come without the cost of ongoing technological advancement and the need to overcome technologically based obstacles that impact productivity and keep manufacturing costs at a higher level than the market may allow 

Whether or not your business happens to fit within the short list of examples of the manufacturing companies in the following chart, you are probably experiencing some of the challenges discussed above:

Increasing Your Competitive Advantage

The Government of Canada's Scientific Research and Experimental Development Program (SR&ED), encourages technological advancement and development through significant cash tax refunds and investment tax credits. These tax refunds can represent a significant reduction in the costs of R&D and provide advantages you need to remain competitive

Will your company be 1 of the 20,000 plus Canadian business claimants that receive their share of the $4 billion refunded through the SR&ED program in 2011?

Does Your Company Qualify For SR&ED?

The majority of the claimants taking advantage of the program are small to medium sized Canadian Controlled Private Corporations, from all sectors of the economy, with $500,000 or less in taxable income and:

1. These companies are conducting their business in Canada and the R&D, for the most part, is performed in Canada
2. Qualifying projects attempt to develop a new or improve an existing material, device, product, or process
3. The work performed is an attempt to achieve a technological advancement
4. Or, the work performed is intended to overcome technological obstacles in the attempt to achieve the technological advancements
5. The claimants are able to demonstrate the pursuit of a systematic investigation, through experimentation or analysis, to overcome the technological obstacles encountered
6. Documentation of the R&D process is available to support the SR&ED claim

Other Indicators of Potential Project Eligibility

• If your engineers or technologists encounter failures in the course of their work, this may point to projects that potentially qualify for SR&ED
• A feasibility study may qualify to the extent that the study is related to the development of a technological advancement
• Listen carefully for the words, fix, improve, creating new, improve existing process or methods, learn
• It is the set of obstacles that you encounter as you strive to increase product quality, production levels, advance the functionality of products, develop new technologies etc. ,in the pursuit of business goals, that determine eligibility, not the business goal itself

Next Steps

• Familiarize yourself with the SR&ED program (click this CRA link)
• Develop a list of questions to help determine your projects' eligibility or improve your understanding of the program and then...
• Call Green Hat Consultants for a free consultation at 604 538-8800 or contact us by clicking this link

 Green Hat Consultants

SR&ED Tax Refunds
12752 28th Ave, (at Crescent Rd)
Surrey, BC V4A 2P4
e-mail: allan@sredtaxrefund.com
604-538-8800