Developing a New Formulation Does Not Automatically Qualify for SR&ED

Date: June 17, 2026
Category: Manufacturing & Engineering

When Formulation Problems Become Technical Uncertainty

Manufacturers often adjust formulations to improve performance, stability, cost, safety, or production efficiency. That can include work on coatings, cleaners, adhesives, polymers, gels, liquids, and other specialty products.

Most of this is routine product development. A new formulation on its own does not automatically qualify for SR&ED.

What matters is whether the team ran into a technical uncertainty. In other words, did the formulation behave in a way that could not be predicted using standard knowledge, supplier guidance, or normal industry experience?

That often shows up when a product separates unexpectedly, cures inconsistently, loses adhesion, becomes unstable over time, or works in a small batch but fails during scale-up.

When that happens, the work may go beyond routine development. A company may need to test different ingredient ratios, additives, mixing methods, temperatures, curing conditions, or batch sizes because the outcome is not obvious in advance.

The key question is not whether the company was creating something new. It is whether the technical result was uncertain and had to be resolved through systematic testing.

Failed attempts can matter too. If the team learned that an expected approach did not work, that may help show the solution was not straightforward.

Routine reformulations, cosmetic changes, and work that simply follows supplier instructions usually do not qualify on their own. But if your company dealt with formulation instability, unexpected material behavior, or scale-up failure, it may be worth reviewing whether some of that work could support an SR&ED claim.