In our last blog post we discussed the numbers associated with SRED. These potential benefits and limits mean nothing if the work doesn’t qualify as eligible SR&ED.
SRED eligibility focuses on what the work is, how the work was done, why it was done, where it was done, and when it was done. Good thing we were taught the what, how, when, where and why thing at grade school, eh?
WHAT? “…systematic investigation or search … in a field of science or technology…” It is not random, and it is a seeking after knowledge. The work must be related to the claimant’s business.
HOW? “by experiment or analysis…”
WHY? “for the advancement of scientific knowledge….or technological advancement” The former is scientific research and the latter is experimental development.
WHERE? The work must be done in Canada as part of the claimant’s business carried on in Canada. There is a minor exception not worth mentioning here. Being part of the claimant’s business does not preclude outside contractors doing the work provided they do it in Canada.
WHEN? The work claimed must have been done in the year for which it is claimed. A project may span multiple years, in which case it could be the subject of multiple claims. A claim has a filing deadline of 18 months from the end of the financial year to which it pertains. If a corporation’s year-end is October 31, 2016, the claimant has until April 30, 2018 to file the claim. There are no exceptions made.
Want to know more about SR&ED eligibility? Get in touch.