When deciding whether to gather sr&ed information and make a sr&ed claim many companies often wonder what types of work qualifies for sr&ed tax credits. A sr&ed project is defined by the Canadian Revenue Agency as “a set of interrelated activities that collectively are necessary for the attempt to achieve the specific scientific and/or technological advance(s) defined for the project, are required to overcome scientific and/or technological uncertainty, and are pursued through a systematic investigation by means of experiment or analysis performed by qualified individuals. In order to better understand this statement we will examine its key points in further detail.
Work that sets about to achieve a specific scientific or technological advance or overcome a scientific or technological uncertainty can consist of a vast amount of tasks. In general if a company is attempting to create a new or improved product or process and the work required to do so is not standard practice it is likely that the work will qualify as sr&ed. Work to improve a product or process or create an entirely new product or process will generally contain setbacks or difficulties that must be addressed, these setbacks form the basis of the “uncertainties” that need to be overcome within a sr&ed project. By collecting information about the setbacks and difficulties that occur while trying to improve a company high quality sr&ed information will be created which can be utilized during the claim process.
The setbacks and difficulties present within a sr&ed project are often the cause of the project being completed in an iterative manner as a solution to a problem is devised, the solution tested, and the results gathered. If the solution is successful the process will be complete however if the solution requires further refinement the process must be repeated for another iteration. This iterative process will normally establish that the project has been completed in a systematic manner as the individuals working on the project will attempt to learn from each iteration how to best solve the problem.
The individuals participating in the sr&ed project as well as the collection of sr&ed information are required to be qualified in the area which they are involved in the project. The qualifications held by the individuals will be as diverse as the tasks required to perform the project. As an example a new product may be designed by an engineer but the prototype fabricated by a press operator, the engineer is qualified to design the product but not qualified to operate the press and visa versa. As we can see the work done by both individuals contributes to the completion of the product and as such sr&ed information related to the labour of both individuals should be recorded.
By better understanding what work qualifies as sr&ed and collecting the appropriate sr&ed information a stronger sr&ed claim can be made and greater rewards gained through the filing process.
B&W Canada gets contract for 8 replacement steam generators for Bruce Nuclear Power Plant.
Goodyear to open Retread Plant. Trend in construction, mining, forestry 7 recycling industries have prompted Goodyear Canada Inc to open a plant in North Bay, On to be completed in fall of 2008.
Onex gets Husky! Onex to pay $960 million for husky injection Molding Systems Ltd.
Patheon Inc to sell Burlington based commercial manufacturing business to Pharmetics of Laval, QC a vitamin & herbal products contract manufacturer.
Mergers and Aquisitions reach 2000 transactions, for the first time resulting in a deals reaching a total of $268.6 billion. The largest deal was an acquisition of Alcan by Rio Tinto for $37.6 billion.
Siemens VDO Plant to close! Due to decrease orders for its product on falling North American car sales and rising cost for materials like copper and plastic.
Changes to the SR&ED Tax Credit Program to encourage more Canadian Companies to claim!
I have been working on an idea for my first blog post. I have been looking on business sites and learning about innovative ideas in the marketplace. I looked at serious social issues, world trade issues and nothing has hit me over the head as to this is the article I should write! I looked at what influences our business community and daily lives more than anything else and I came up with “Products”. Our whole economy is built on selling and introducing product. Companies thrive on introducing new products into the marketplace. To remain relevant and competitive there is a constant need to improve. Companies do this by innovating. As I wrote that last line, I discovered my topic; innovation and what people see as innovation in their lives.
People think in order to be innovative you need to create something totally brand new, not the case. Most innovation is really an improvement to something that has been around forever. Take a look at the microwave, when it came out, it most definitely was an innovation. But is it not just an improvement to the stove? I think that can be said for a lot of innovations. Is the bicycle not just an improvement to the unicycle? I think in fact that it is the other way around with the bicycle, but I digress. A definite improvement is easy to spot and because of that most people think they know what an innovation is. Innovation can be classified on a smaller scale; it can be a new way to seal a container or adding ingredients to a baked good recipe to shorten baking time. It is not normally seen by the naked eye. The problem a company has when trying to identify their innovation is that it goes unnoticed. Companies are so absorbed in the final product that they don’t see the innovation that happens along the way.
There is definite value in finding innovation in your company. I can speak to this when it comes to ITC’s (Innovative Tax Credits). Until an outsider like myself points it out to them, most companies I visit don’t realize how innovative they are. Sometimes it takes someone impartial to see what they’re missing right under their own noses.
So what do people see as innovation in their lives? Well, from my standpoint they are not getting the whole picture. Everyone can assume that innovation is something totally new and different and never been seen before, but there are smaller innovations that happen all the time that go unnoticed.
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