Introduction to SR&ED

SEEK Solutions

Global R&D Subsidies

DefinitionInternational:

“For a … project to be classified as R&D, its completion must be dependent on a scientific &/or technological advance, the aim of the project must be the systematic resolution of a scientific and/or technological uncertainty.”

Source: Frascati Manual 2002, paragraph 135

Canada:

Systematic investigation or search, that is carried out in a field of

science or technology, by means of experiment or analysis and that is:

a) Basic Research

b) Applied Research

c) Experimental Development *

*advancement for the purpose of creating new, or improving existing, materials, devices, products or processes

Source: Income Tax Act Subsection 127

CRA Five Questions

1. Was there a scientific or a technological uncertainty —an uncertainty that could not be removed by standard practice?

2. Did the effort involve formulating hypotheses specifically aimed at reducing or eliminating that uncertainty?

3. Was the adopted procedure consistent with the total discipline of the scientific method, including formulating, testing, and modifying the hypotheses?

4. Did the process result in a scientific or a technological advancement?

5. Was a record of the hypotheses tested and the results kept as the work progressed?

5 Sections

1. Objective – Quantify what you are trying to accomplish

2. Standard Practice – Explain why you don’t know how to achieve objective

3. Hypothesis – Select variables to test

4. Testing – Isolate variables and test a range of parameters

5. Conclusion – What you learned about the variables

Repeat steps 3 to 5, refining hypothesis until project complete

What Qualifies?

• Employee hours

• Contractors

• Materials Consumed

*Directly related to resolving the uncertainty

Formulating hypothesis

Designing tests

Testing

Analyzing results

Activities

Eligible Ineligible

Engineering Commercial Production

Design Market Research

Operations Research Sales Promotion

Mathematical analysis Quality Control or Routine Testing

Computer programming Social Sciences

Data gathering Humanities

Testing Aesthetic or Style Changes

Examples of evidence to support the SR&ED work claimed

Supportingevidence

Technological advancement

Technologicaluncertainty

Work done Dates Employees involved

Project planning documents

Records of resources allocated, time sheets

Design of experiments

Design documents, CAD and technical drawings

Project records, laboratory notebooks

Records of trial runs

Project progress reports

Minutes of project meetings

Test protocols, test data, test results

Analysis of test results, conclusions

Final project report or professional publications

Photographs and videos

Prototypes, samples

Scrap, scrap records

Contracts

Date Hours Persons Project Variables Result

Feb 14, 2014 4 Bob Process Improvement

TimeTemperature

100C at time of 30 seconds gave best film thickness

New Time Sheet

Test Matrix

Variable 1 Variable 2 Variable 3

Variable 1 Result Result Result

Variable 2 Result Result Result

Variable 3 Result Result Result

Time\Temperature 120°C 130°C 140°C

300 seconds 7 microns 6.5 microns 7 microns

330 seconds 8 microns 7 microns 7 microns

360 seconds 9 microns 8 microns 7.5 microns

Example Project

Objectives:

• Thickness tolerance (microns)

• Film hardness (Rockwell)

Standard practice:

• Process developed in-house

• Complex part geometry

• Standard methods were tried and failed

Hypothesis:

Process parameters will increase thickness

Variables

a. Temperature

b. Dip time

Conclusion

Slow dip times increased thickness while a moderate temperature reduced dripping

Want to know more?

Twitter: @SRED_ShaunLinkedIn: Shaun Button

SEEK Solutions