Not only are there countless benefits, but conducting it means potentially taking advantage of Scientific Research and Experimental Development tax incentives given out by the Government of Canada. While your interest may be peaked, you might still be wondering what is research and development?
Research and Development Defined
Often a necessary first step, research and development is any activity a company conducts in order to bring a new product or service to market. The upsides that come with these innovations usually reach far beyond the company itself, often benefiting an entire industry. This is why the Government of Canada offers millions of dollars to these companies every single year.
The Benefits of Research and Development
When it comes to the why, research and development is a no-brainer, especially with much of the cost finding its way back into your business.
Take Advantage of New Technologies
The world moves fast and technology moves even faster. Reacting to new tech and finding ways to implement them effectively is a fantastic way for companies to stay competitive.
With the implementation of new technology, comes ways to improve productivity and further increase your profit margins.
Capitalize on Trends
When a trend arrives, do you want to be the company that hops on the boat too late? Or would you rather be the one that reacted early and reaped the rewards of being proactive?
Improve Your Foundations
Research and development doesn’t just mean creating new products. It can also help you build upon what’s already there, giving your clients and consumers more reason to stay loyal.
The Long Game
Research and development, at least in the short term, is often seen as an expense. However, it often leads to profit increasing advancements. So, instead of thinking of R&D as a cost, think of it as an investment. An investment that often pays off in the form of patents, trademarks, and other breakthroughs that increase your bottom line.
When it comes to research and development there are four activities that are eligible for SR&ED tax incentives:
Often aimed at a broader or more fundamental concept, basic research doesn’t have specific products, policies, operation processes, or applications in mind.
The opposite of basic research, applied research is conducted with a specific goal in mind. Due to its more direct focus, applied research is often more costly.
This is work conducted with the purpose of improving or creating new materials, products, or processes. This step comes after one of the two research stages.
This can include engineering, design, operations research, mathematical analysis, computer programming, data collection, testing, and psychological research.
Better Safe Than Sorry
While the activities listed above will all qualify, conducting them in the proper manner and with all the proper steps is crucial if you want to receive your full tax refund.
If you’re unsure about the process, or need help with a completed project, Maxim Innovation is here to help. We have success with clients across multiple industries and are experts in making sure you never leave any money on the table.