Tag Archives: how to qualify for SR&ED

Tax Credits for Farmers & Food Industry

The food, beverage, and agriculture industries offer many opportunities to sr&ed for food production and farmerscapitalize on SR&ED funding. In making your business competitive in Canada, you’ve probably experimented with your normal routines or tried developing new products.

Once satisfying the basic requirements, the scientific development does not need to be groundbreaking to benefit from funding—it can be as simple as adding a gluten-free version of a popular treat to you bakery’s menu or finding a use for everyday waste materials.

Here are some examples of everyday farming and food processing projects that could be eligible for SR&ED funding:

Farming and Agriculture

As populations rise and conventional farming methods become dated, the federal government is rewarding farmers who advance agriculture techniques. Modifications that increase crop yield or altering equipment to increase production and safety are common projects.

Attempts to make your farm more environmentally-friendly also benefit from funding, such as developing alternatives to harmful chemicals, using equipment that requires less energy, or improving irrigation techniques and routines for reduced water use.

Finding a practical use for traditional waste (manure, groundwater, or leftover livestock feed) can receive funding, such as altering equipment to be powered by unused grains or corn.

Processing and Manufacturing

Food processing companies also reap the benefits of SR&ED funding. For example, developing an existing product to meet consumer needs of gluten-free, sugarless, and nut-free foods is a simple and common procedure that many food processors and restaurants already do.

Experimenting with ingredients to extend a product’s shelf-life or to improve flavour and nutrition also qualify. Conducting research on the impact of a process, such as your storage or shipping techniques are included in the program as well.

Vineyards and Breweries

In trying to create the next must-have wine, there’s a good chance you altered your usual process.  Experimenting with soil types, grape selection, and water control are everyday activities that qualify for tax credits.

Funding is also available for breweries. Examples of eligible projects include changing the bottling process for better efficiency, experimenting with hops to improve flavour, or developing new packaging to reduce materials.

Plants and Greenhouses

Everyday greenhouse operations could also lead to your business receiving SR&ED funding. Modifying seed combinations, experimenting with temperatures, and determining how to better grow plants that are non-native to your area are examples that may qualify.

Various types of research may also be eligible, such as examining how different temperatures, lighting, and irrigation routines impact growth. Be sure to record all experiments and research details, no matter of the success.

Many businesses across Canada are satisfying the requirements without realizing they may be eligible to recover up to 65% of their eligible expenses.

To find out how your routine food and agriculture activities could result funding, contact Enhanced Capital Recovery today for a no-risk consultation.  We’re your SR&ED consulting experts in Vancouver, Edmonton and Toronto.

Does My Company’s Work Qualify for SR&ED Funding?

Each year, the Canadian Revenue Agency (CRA) provides over $4 billion in tax credits through the SR&ED solutions Edmonton Vancouver TorontoScientific Research and Experimental Development (SR&ED) program, often to small or medium sized companies.

However, countless businesses across Canada miss out on these incentives despite satisfying the program’s criteria in their everyday activities. In fact, qualifying for SR&ED funding is easier than many think—here are the program requirements that your company may be satisfying right now.

Basic SR&ED criteria

The CRA outlines three requirements your business must complete to earn SR&ED credits:

  • You attempted to overcome a technological uncertainty
  • You used unfamiliar, systematic research and development to solve the problem
  • You aimed to advance a science or technology in the process

While the experiments must be conducted with a measurable goal, they can involve basic or applied research—advancing scientific knowledge with or without an intended use in mind. For example, if your goal is to improve an artificial flavouring, it does not need to be used for a specific food or beverage.

Your projects do not need to be successful to qualify for funding, as long as you can provide evidence of the attempt.

Scientific research

There is a misconception surrounding the program’s scientific research aspect that it is reserved for medical, biological, or other laboratory research. In reality, the research can be as simple as a video game producer researching methods of advancing game play graphics.

The results are not required to be innovative to the industry, but the acquired knowledge or technological advancements must be new to your business.

Experimental development

Many small businesses qualify for experimental development as part of their daily activities without realizing it. Conducting experiments to create new products, machinery and manufacturing procedures are accepted, but so too are innovative services and support work.

Improvements to existing technology also qualify, such as adapting computer software for enhanced efficiency or improving the machinery to manufacture clothing garments.

What doesn’t qualify?

There are some types of research and experimental development that do not qualify for SR&ED funding. Since the projects must be conducted with a planned approach, any random or routine investigations are not eligible, including quality control procedures.

Work that can be classified as commercial gain does not qualify, such as promotions, market research, or the commercial use of a new technology. Experimentation to a product’s style is also not accepted.

Procedures related to mineral, natural gas, or petroleum production, including exploration and drilling, also do not qualify for SR&ED funding.

Companies that file a claim could receive up to 65% of eligible expenses returned as a tax credit. To determine if your business is fulfilling SR&ED program requirements, contact Enhanced Capital Recovery for a free consultation today.