Construction and real-estate is facing technological challenges today. Financial uncertainty and economic is now in doubt. Regulatory difficulties start to rise and there are always additional and unpredicted costs. There are customers who are demanding for more technological innovation including the originality, environmental design and value. This is both in final product and construction supply. Scientific Research and Experimental Development (SR&ED) is one of the best funding programs which offers substantial incentives and tax relief in today’s market. Researching for new inventions and innovations are very important especially if it is for the development of the economy.
The activities in the SR&ED are far different than that of laboratories which are doing traditional scientific research. Despite general opinions, the SR&ED tax relief could be applicable for construction and real-estate businesses if it supports new or improve products or processes regarding the development; design of structures; equipment of building materials; and energy sources.
Examples of eligible activities to qualify for SR&ED tax relief:
- Development and design of construction tools and equipment: This could involve development of a specialized machinery for lifting, mixing or processing materials to reduce any health and safety risks.
- Improvement of materials: This includes development of new or improve formulations of construction materials. Materials may include glass, alloys, metals, ceramics, cement, plastics and insulation.
- Structural design: This may include development of the retractable roofs and the installation of the solar system or other renewable energies.
- Construction techniques: This involves developing new techniques in order to improve the quality, efficiency, durability and soil remediation.
- Enhance health and safety risks at work place
- Improvements of mechanical systems: Heating, Ventilating, Air Conditioning, Water supply.
Research and innovation in construction industries could assure the safety of people while achieve significant quality improvement. Engineering organizations hired by construction and real-estate firms usually carry out eligible projects but their lives are at risk. Expenses incurred to eliminate any operational safety issues can be claimed through SR&Ed tax relief.
Qualified expenditures for tax relief are direct labour, material expenses and contract payment. To be entitled for SR&ED tax relief there are rules to be clarified in contract payments. These are designed in order to avoid Canadian companies in claiming the tax relief for the same project. In order to know who are allowed to have SR&ED claim, there are three criteria that are examined:
- The performance requirements of the contractor: It is important that contractor who will do the task has a requirement. This is for security and assurance.
- Risks versus pricing: Any fee or price in the contract should be known. It is important to know and settle everything before the work. If the contractor will be paid or not even he does not meet what is stated in the contract, this should be indicated in the contract. If it is included, then financial risks should be taken by payer.
- Service contract: This tells that the work of the SR&ED is performed.
As an investor, developer, contractor, property supplier or manager and builder, the challenges in industry is not greater.
Kelid™ has years of experience helping companies dig up claimable projects that they were not even thinking about when they called. It costs you nothing to ask for a meeting to see if any of your work this year is eligible for the tax relief, because we do not get paid until your claim successfully goes through. We strongly suggest to check out Kelid’s interactive Self-Assessment LookUp to determine eligibility of your projects.