In July of 2011, the CRA released an updated version of The SR&ED Technical Review: A Guide for Claimants. The Guide is an extremely useful tool which outlines the expected procedures that will be followed in the event that a claim is selected for review by the CRA. It covers everything from anticipated processing times, to what to expect from a field visit from your local Research and Technology Advisor (RTA). The Guide is an essential read if you are preparing for an audit defence for the first time without the help of an experienced SR&ED consultant.
As a starting off point, the new version is a welcome change. The previous version had not been updated since January, 2000, and the SR&ED program has evolved considerably since then. In general, the changes are favourable in that many of the primary questions and concerns of claimants are addressed to some degree in the new version.
The guide itself has a twin partner, which was also released at the same time. This is the CRA’s internal counterpart to the Guide for Claimants, known as the Claim Review Manual. This other guide is also available online to the public (though with several sections redacted), and follows the same format as the Guide to Claimants, though from the reviewer’s perspective. Both books are based on the same overall policy of the CRA, and there are no noticeable policy deviations between the two.
3 Key Impacts on the SR&ED Program
Despite the fact that the changes made to the Guide don’t represent a sweeping overhaul to the program, the updated version has had an effect on the review process that claimants should be aware of. The following are three of the key impacts:
- Greater Emphasis on Co-operation: The review process has always been a two-way street, with the claimant and reviewer giving and receiving information simultaneously. However, by solidifying this understanding in writing, the new Guide ensures that this process remains consistent. There still may be a ‘recovery’ mindset internally at the CRA due to the heavy “compliance” (read: audit) background of many senior individuals, but the official review process should simply be a sharing of facts and information as opposed to an actual audit.
- Timelines for Claimants: The new Guide lays out how much time the claimant has to respond to each request for information made by the CRA agent. For example, the client must respond within 30 days to the initial request for information after contact has been made. It is vitally important to note that failure to comply with this mandate could forfeit your claim, so be sure to check your email often! Unfortunately, there aren’t any strict timelines for the RTA’s schedule.
- Combined Financial/Technical Review: Although both a financial reviewer and a technical reviewer are assigned to the file, the CRA have structured the program so that claimants aren’t required to attend twice as many meetings with each reviewer. Everything is (theoretically) collected and analyzed simultaneously, which ideally should speed up the whole review process.
Take the time to familiarize yourself with the changes to the Guide for Claimants, as well as the CRA’s overall SR&ED claim review process. Ensuring that you understand the most current version of documents governing the SR&ED program is an excellent way to minimize your risk of audit and reduce the amount of time you need to spend liaising with the CRA–time that ultimately takes away from your ability to innovate.
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