SR&ED Tax
Credits
The Scientific Research & Experimental Development (“SR&ED”, “SRED”,or “shred”) program is Canada’s largest R&D Tax Credits program. It is designed to encourage businesses to carry out their research and/or development (R&D) in Canada. Over $3.6 billion in form of cash or tax refund is filed and paid to over 22,000 small to large businesses each year as long as the eligible work has been performed in Canada.
The program has two separate components: the Scientific Research component and the Experimental Development component. Each has different eligibility and claiming criteria. Approximately 75% of claimants are small businesses. Approximately 90% of the money distributed through R&D Tax Credits for development projects and 10% for Scientific Research. It is highly important to determine eligible projects as it is usually much more broad than what most typically think of as R&D. This incentive program has very specific eligibility criteria, but these criteria apply quite broadly to the shop-floor work performed by most small businesses or manufacturers. The most common mistake made when filing for R&D Tax Credits is underestimating eligibility. Failures are typically an important sign for eligibility of a project. It is common for a business to underestimate their eligibility by lack of knowledge in identifying eligible projects or qualified expenditures.
The top most manufacturing sectors that qualify for the SR&ED tax credits are:
Software development and computer services
Manufacturing and Metal Fabrication
Automotive
Aerospace
Communication/telecom equipment
Robotics & Automation
Medical devices & instrumentation
Pharmaceuticals
Chemical
Cosmetics
Furniture and Upholstery industries
Textiles Industry
Advanced Manufacturing and Assembly
Medical and Clinical
Welding and Spring Manufacturers
Photonics
Laser Marking, Engraving and Cutting
3D Printing and Scanning, Rapid Prototyping
3D Imaging,
Advanced Materials
CAD/CAM
Castings
Design Engineering
Micro Machining and Tooling
PLM/ERP Manufacturing Software
Pneumatics & Hydraulics
Testing & Instrumentation
Kelid™ assists you in all filing stages to increase the claim size by a factor of 5 or 10x through educating and training your personnel about the program and thorough investigations of resources allocated to the eligible projects. If you are successfully claiming and wish to continuously do this, it is advisable to assess your R&D Tax Credits with a trustworthy consultant if possible, a company that has knowledge about audit defence in addition to a record of successful claims. Moving on, advisors could possibly recommend time tracking systems that won’t use up excessively much of your time and effort which will help you stay on track for future claims. For further information on project eligibility check Kelid™’s Assessment Look Up and Claim Calculator.
