Scientific Research & Experimental Development (SR&ED) Program Explained
The Federal Government realizes the difficulties of scientific research and helps out companies through the SR&ED program. We have taken advantage of this program as a company that specializes in developing custom applications and using technology to its fullest.
The type of projects Innosphere develops often involve creating a product that doesn’t already exist. During this process our developers spend time researching and creating new ways to achieve results. The unique knowledge gained from this course of development is what the government is rewarding through the Scientific Research & Experimental Development (SR&ED) program.
According to the program description on the Canada Revenue Agency website,“The Scientific Research and Experimental Development (SR&ED) Program is a federal tax incentive program to encourage Canadian businesses of all sizes and in all sectors to conduct research and development (R&D) in Canada that will lead to new, improved, or technologically advanced products or processes.” It further explains,“The SR&ED Program is the largest single source of federal government support for industrial R&D.”
– Canada Revenue Agency. (May 2014). About Our Program. Government of Canada.
Retrieved from: http://www.cra-arc.gc.ca/txcrdt/sred-rsde/bts-eng.html
A group from Pinnacle Consultants Inc. came into our office and further explained the program to the developers at Innosphere. Their main points surrounded the importance of considering these five steps in order to be successful in submitting an SR&ED claim:
- Was there a scientific or a technological uncertainty – an uncertainty that could not be removed by standard practice?
- Did the effort involve formulating hypotheses specifically aimed at reducing or eliminating that uncertainty?
- Was the overall approach consistent with the scientific method, including formulating, testing, and modifying the hypotheses?
- Did the overall approach result in a scientific or a technological advancement?
- Was a record of the hypotheses tested and the results kept as the work progressed?