The Polymers and Plastics sector plays an important role in industrial and economical growth. There are numerous industries that dependent upon plastics sector such as electronics, automotive, construction, agriculture, food processing and packaging. This vital relation with other industries makes plastics industry leading eligible industry to claim innovation Tax incentives and Research Grants.
Most of the SR&ED Tax Rebates for R&D and innovation in polymers and plastics industry are claimed for experimental development. This is mainly because the basic scientific research are practiced at some educational institutions and the companies’ are left with technological advancements to be done. For examples, chemical companies develop resins and the catalysts and universities arrange their molecular level studies. Although, the basic general technology exists in plastics industry, but individual applicants lack technology. Therefore polymers and plastics sector require most of the R&D tax rebates provided by SR&ED.
Eligible SR&ED activities for Plastics and Polymers Industry fall under four primary areas:
A company, attempting to create new Polymers and Plastics that are not part of standard industry practice and company’s proprietary information, could claim SR&ED. As the materials used in plastics industry vary in chemical and physical properties, the company might experiment producing a new polymer with variant components possessing different properties. The common examples of these innovative practices are ‘Material Substitution’, ‘Dual Injection’ and ‘using Different Equipment’. “Compression Moulding – Formulation Development” can be quoted as a suitable example. Adding modifiers, lubricants, additives, etc. to the formulation is another example.
SR&ED Tax Rebates could be claimed for development of a completely new process or modify/change an existing process. “Co-Extrusion” is one of the best examples which requires investigation on feeding speed, heat profiles, etc.
There are times when research and investigations are required to modify or improve existing equipments. These technical problems would be solved using concepts of experimental design and advance problem solving techniques. Such projects are often part of SR&ED to correct a specific efficiency or achieve a specific operational capability. The common example of such technical projects is “Screw, Barrel or Runner Design”.
SR&ED can also be required to produce products that will consistently meet end use properties. For example subjective properties or aesthetic qualities such as opacity, odour, surface finish and flatness should be met.
Examples of SR&ED Tax Rebates for Eligible Projects:
- Experimenting with interaction of unknown components/processes
- Encountering issues with yield, formulation, strength (plastic) and interaction (chemical)
- Investigating different resin types and blends to realize mechanical properties of finished product
- Optimizing process parameters to reduce cycle times and improve product quality
- Modifications to tooling (feed screws, dies, vacuum sizers, etc) to enable a process or improve an existing process
- Experimentation with incorporation of post‐consumer recycled content or new polymers
- Development of polymer components to replace existing Meta
If you have any further questions about eligibility and your specific situation, feel free to contact Kelid™ for helpful advice. If you have a question that you feel can help other people in similar situations, leave a comment below.
[…] Plastics industry conducts research and development to create innovative products that can meet technological requirements of market. The production of such products can easily attract Research Grants or SR&ED Tax Incentives. Similarly Mould and Die and other tools which can be sold after manufacturing certain products also fall in the category of SR&ED eligible projects. Examples of such projects are injection moulding machines, presses used for moulding and extrusion, blow moulding or injection mounding of plastic or metallic parts such as railway carriages, boat hulls, plastic tanks, aluminum profiles. Moulds are usually developed to create products with specific and unique features. Mould makers take orders and create custom build Mould and Die. They must develop moulds keeping the required technology in mind. Most of the time, the relationship between mould makers and their customers depends and vary upon the skills of mould makers and need of customers. The ownership of the Mould and Die design determines how mould maker, customer or both can claim SR&ED expenses. Usually mould shops have minimum 10 and maximum 100 highly trained and qualified experts. These professionals posses experience and skills in specific areas of work such as metallurgy, plastics, pneumatics, electronics, hydraulics and thermal management. They are named mould makers, CNC operators, EDM operators etc, depending upon their areas of specialization. […]