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.