SR&ED is, on its face, a simple enough concept. The problems arise with varying interpretations of some pretty basic English. The fundamentals of it are that you need to be seeking technological advancement through scientific research or experimental development that is done via systematic experimentation or analysis. It means being faced with a technological gap — not knowing how to do something – which cannot be filled by the knowledge that is available in the public domain or which is usual knowledge for workers in your field. You start with what people of your profession are expected to know, and you add to that what is already being disseminated in the public domain, and the combined pot of knowledge is your baseline.
To have SR&ED, you have to be achieving knowledge that is beyond that baseline but is in your field. There are fields of activity that are proscribed: marketing, routine testing, humanities, prospecting or exploration for minerals or petroleum or natural gas, commercial production, styling, or routine data collection.
Further, the reason you have achieved the new knowledge is that you were trying to. That may seem axiomatic, but sometimes people discover something new when they are really only trying to improve some aspect of their business. You must have been trying to resolve technological uncertainty. And you must be able to answer Yes to each of five questions.
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