What is SR&ED eligible?
Not all R&D is necessarily SR&ED. To qualify, there must be a scientific or technological uncertainty involved in achieving an objective. This uncertainty must be approached with a systematic investigation involving the formulation and testing of hypotheses.
SR&ED work falls into one of these three categories:
- Basic research - work undertaken for the advancement of scientific knowledge without a specific practical application in view.
- Applied research - work undertaken for the advancement of scientific knowledge with a specific practical application in view.
- Experimental development - work undertaken for the purpose of advancing technology in order to create new, or improve upon existing, materials, devices, products or processes.
Other work that directly supports SR&ED can also qualify as eligible expenditure. Eligible support work includes engineering, design, operations research, mathematical analysis, computer programming, data collection, testing or psychological research.
The following types of work are not generally considered SR&ED eligible:
- Market research or sales promotion
- Quality control and routine testing
- Research in the social sciences or the humanities
- Prospecting, exploring or drilling for, or producing, minerals, petroleum or natural gas
- The commercial production of a new or improved material, device or product
- Style changes
- Routine data collection
Best practices for submitting a successful SR&ED claim
Keep all contemporaneous documentation
Establish the technological uncertainty and your systematic investigation
Timesheets are key
The CRA has great resources where they explain the program in detail.
They have produced the videos below, which are a good place to start if you’re new to SR&ED.