Understanding and Identifying Potential SR&ED Within Your Business Project
The development of new or improved Products or Processes does not necessarily indicate SR&ED activity.
Novelty, innovation or uniqueness are not sufficient to demonstrate Technological Advancement.
It is important to separate what is considered to be Due Diligence and Standard Practice within your industry from activities aimed at overcoming Technological Obstacles and Uncertainties where the outcome cannot easily be predicted.
Development Based on Standard Practice:
- Standard Practice refers to adapting a known engineering or technological practice to a new situation when there is a high degree of certainty that the known technology or practice will achieve the desired objective.
- The improvement of existing technologies or methodologies using well-established “routine engineering or routine development” would be ineligible if the outcome is predictable.
Development Based on Standard Practice vs SR&ED:
- Project Engineering/Management – determination and design of a new process in itself is not SR&ED
- Application of existing knowledge with minor modifications to optimize response and
- Monitoring of product and process for optimization and adjustments to known parameters are ineligible activities
- SR&ED: planned systematic experimental work to address specific technological limitations or to advance technology are eligible activities
Due Diligence:
- Use of in-house experience
- Generate and explore concepts
- Reasonable search for information
- Consultations with other producers and suppliers regarding known methodologies
- Educational courses
- Publications and information sources
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