The SRED program is administered by CRA because it is the Income Tax Act of Canada that gives the program its authority.

Our experience is that dealing with the people in the SRED sections of the various CRA offices is routinely pleasurable.  The culture seems different from what we have observed in some other sections.

We have no fear of a SRED audit.  First, the audit can be useful to helping all people concerned to understand what is eligible and how to apply the law to the taxpayer’s benefit.  Second, we have not experienced that CRA SRED auditors are aiming to reduce the claims.  Basically they seem to want mainly to make sure that the claims are prepared in a fashion that reflects an accuracy born of knowing the rules.  SRED audits are educational experiences.

One of the reasons for this CRA attitude is that the governments behind the SRED credits have instituted them as an economic policy.  In fact, the taxation on the SRED receipts plus the taxation of the jobs created by the SRED program may even raise more revenues for government than is expended by them on SRED credits.

Don’t misunderstand: auditors do reject claims or offer partial credits, and this can happen when they don’t understand what you are claiming or when your claim fails to fall within the parameters of what is allowable.  This is one reason is useful to have a professional assist you in preparing and presenting your claim.

To minimize the foregoing problem, compile SRED information throughout the year in advance of the claim. Record technological uncertainties as they are discovered.  Document efforts to reduce these uncertainties as they occur.  Several times a year perform a critical review of this compilation of information to see what is missing or could be improved.

One of the concerns many people have about filing a SR&ED claim is the amount of time they will have to spend. It would be misleading to say that you would not notice the demand on your schedule. It DOES take time, but it can be minimized.

Some people gather together and catalogue everything they can think of which CRA might want to see in an audit of the claim. For some claims, this can be a daunting task!

Our approach is a little different. We understand the key aspects of a successful SR&ED claim and we focus our efforts on gathering information that will allow us to present them in the claim.   This process starts with a short pointed questionnaire which we provide the claimant and which is directed towards having the claimant give us information that counts rather than things that would be interesting to know but which are not pertinent to the claim. We don’t believe in you spending time assembling documents and information that you will never need to produce, but at the same time, we believe in making sure you know where these items are in case you need to assemble them to answer CRA questions later.

In short, our clients find that a claim normally involves a few hours of their time. A little here and there spread over a few weeks and not adding up to an uneconomic amount. Our clients almost always (in fact, I could say “always”, but say “almost” just in case I am wrong) feel that the reward far outweighs the time invested.