New CRA service standards were announced April 1, 2018 affecting SR&ED claims. These changes will potentially decrease wait times for some SR&ED claimants.

What are service standards?

Service standards are set by organizations to stipulate the standard processing times. The Canada Revenue Agency (CRA) publicly announces its service standards to allow consumers to understand the level of service, including wait times, that they can expect to receive under normal circumstances. Having a maximum and standard wait time in view allows consumers to more accurately budget resources and plan accordingly. In addition, having these service standards publicly available means that the CRA can assess its own workflow practices for internal accountability and to ensure that acceptable standards are being met.

The new set of service standards relating to the processing of SR&ED claims were announced on April 1, 2018, making 2019 the first taxation year that they will be fully in effect and monitored. Prior to these changes the was following standards set in 2001/02 – almost 20 years old! 1. (We last wrote about service standards in 2015 – read that post here.)

2001/02 Standards

The previous service standards were split into four categories, as outlined below.

  1. Claimant requested adjustments to non-refundable claims (these relate to complete claims for non-refundable claims relating to adjustments from previously filed tax returns)
    Processing time: 365 calendar days from receipt
    Goal:  90% success rate
    Achievements: 2017/18 fiscal year the goal was achieved 94% of the time
  2. Claimant requested adjustments to refundable claims (complete claims for adjustments from previously filed returns)
    Processing time:  240 calendar days from receipt
    Goal:  90% success rate
    Achievements:  2017/18 fiscal year the standard was achieved 92% of the time
  3. Non-refundable claims
    Processing time:  365 calendar days from receipt
    Goal:  90% success rate
    Achievements:  2017/18 fiscal year the standard was achieved 96% of the time.
  4. Refundable claims
    Processing time:  120 calendar days from receipt
    Goal:  90% success rate
    Achievements:  2017/18 fiscal year the standard was achieved 94% of the time 2

The above four classifications did not however take into account whether or not the claims were selected for audit/review, an occurrence that can significantly affect processing times.

What has Changed?

The main change relates to the grouping of claims. The CRA has split the processing time calculation for claims into two groups – those selected for review/audit and those that are complete and ready for processing.

Standard complete claim
Processing time: 60 calendar days from receipt
Goal: 90% success rate
Will begin tracking this achievement starting in the 2018/19 fiscal year

Claim selected for review/audit
Processing time: 180 calendar days from receipt
Goal: 90% achievement rate
As above, tracking for this standard will begin in the 2018/19 fiscal year. 3

In addition to the above, the CRA has eliminated service standards for non-refundable claims. These will be processed as filed and then subject to a review or audit up to the legislated statute barred date. (In normal circumstances the statute barred date for a corporation other than a Canadian controlled private corporation is four years.  In any other case (individual or CCPC) it is three years. 4.

The Canada Revenue Agency states on their website:

The SR&ED program is the largest single source of federal government support for industrial R&D. The SR&ED program gives claimants cash refunds and/or tax credits for their expenditures on eligible R&D work.

The reduced wait times introduced with new service standards should increase program accessibility and encourage greater numbers of applicants going forward, further highlighting the current government’s positive emphasis on innovation, research and development in Canada.

 

Do you think the updated service standards are an improvement?
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Show 4 footnotes

  1. Government of Canada.  Canada Revenue Agency. (2018, December 14.) Service Standards 2017 – 2018 Retrieved January 24, 2019, from https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/service-standards-cra/service-standards-2017-2018.html#benefit
  2. Government of Canada.  Canada Revenue Agency. (2018, December 14.) Service Standards 2017 – 2018 Retrieved January 24, 2019, from https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/service-standards-cra/service-standards-2017-2018.html#claims
  3. Government of Canada. Canada Revenue Agency. (2019, January 16) Service Standards 2018 – 2019 Retrieved January 28, 2019 from: https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/service-standards-cra/service-standards-2018-2019.html#lnk3
  4. Government of Canada. Canada Revenue Agency. (2017, October 31) Financial Claim Review Manual – Review procedures for financial reviewers. Retrieved January 28, 2019 from: https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/program-financial-claim-review-manual-review-procedures-financial-reviewers.html#N10E4A

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