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Changes to SR&ED Eligibility – Act Now

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CRA Changes to SR&ED Project Eligibility
Act now to voice your opinion on CRA changes to SR&ED eligibility.

Recently, we posted a note regarding the public consultations that were ongoing regarding SR&ED policy review. Today is the final day for reviewing the Public Consultations – Policy on the Eligibility of Work for SR&ED Investment Tax Credits (Draft). Have you shared your thoughts with the CRA? Here at SREDucation.ca, we are concerned about some of the changes that are implied in the new text as these are changes to SR&ED eligibility.

In particular, there are inconsistencies between many of the definitions and a severe lack of clarity in many of the revised sections. Furthermore, there is a real concern that these policy changes may go directly against the Reducing Red Tape initiative, and actually increase the level of documentation required for the companies. An increase in the documentation required will only make claims harder for everyone involved.

We have prepared a detailed critique of the new policies, focusing on our main points of concern. Click here to access it in PDF form — InGenuity Group’s Submission to the CRA re: SR&ED Eligibility.

If you have not done so already, please submit your feedback to the CRA.  These changes aren’t simply going to affect “some other company”.  They will affect everyone who is involved in developing new innovative products and processes in Canada, as well as those who provide supporting services.  This is your chance to have a say and we recommend that anyone involved in SR&ED submit their feedback, as this is a prime opportunity to make a difference and let your voice be heard. It is not too late to act!

Want more information on what these changes could mean for your SR&ED projects? Contact a professional.

*** This information is presented for educational purposes only and does not constitute legal advice. You should retain legal counsel if you require legal advice regarding your individual tax situation. *** 
What are your thoughts on the proposed changes? Did you submit your feedback?

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Elizabeth Lance

Elizabeth is known as the "SR&ED Maven" in the industry. With a love of documentation and the nuances of language, she is often engaged by multi-million dollar companies to help improve documentation and workflow processes. Her favourite sentence (which she hears regularly) is "Accepted as Filed". Find out more about her on LinkedIn.

8 thoughts on “Changes to SR&ED Eligibility – Act Now

  • This is very concerning. I have sent my feedback.

    Reply
  • As if it wasn’t hard enough already to apply! Aren’t they in the middle of some review already? Not sure why you’d start one before finishing the other…

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    • This can be a little confusing, but as far as we can tell, there is currently only one official review going through the Canadian government. This was formed in October of 2010, and is chaired by Mr. Tom Jenkins.

      The whole review process itself has several distinct phases however, which might be what you’re referring to. When the panel was first formed, they solicited opinions on the actual policy changes that Canadian businesses wanted to see. This received hundreds of responses, and the archive can be found here

      Based on these responses, the committee put together the current draft document which is what is creating all the uproar. Many companies feel like their suggestions weren’t taken into account, particularly those dealing with industrial research. We’ll elaborate more on this in a future post. In any case, that’s the timeline of the current policy review.

      Reply
  • The BCTIA is getting good press on this on twitter – join in here to provide feedback.

    BCTIA Tweet: bctia: We’re getting amazing feedback on the importance of SR&ED! Join the discussion here: http://ht.ly/1eavrB

    Reply
    • Awesome! As more companies become aware of the dangers of this new policy change it becomes even more difficult for the government to go ahead with this plan.

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  • You say that these changes could increase the level of documentation required. As the owner of a small tech company (less than 10 employees) I’ve considered applying for SR&ED but I’m already concerned about diverting people and resources away from the tasks at hand (for an uncertain result). Already the documentation requirements seem rather daunting and onerous and requiring us to document every single detail is especially difficult for small businesses. Why apply for SR&ED if it seems like one step forward and two steps back? Anyway, thanks for the helpful info. Great site!

    Reply
    • Thanks Stan! We’re glad you like the site. Keep coming back periodically and we’ll be posting more information, including tips on record keeping which you might find helpful.

      Yes, we are finding that many of our own clients are saying similar things regarding documentation. Even without these policy changes, we have noticed that there has been a ‘documentation creep’ which has been slowly increasing over the past 15 years. We highlighted the fact that the new changes are biased towards larger companies in our own submission which is linked in the article.

      With regards to your situation, yes SR&ED documentation is an investment but once a good company wide record keeping policy is implemented, it will pay off in the long run. There are few engineers who like keeping time sheets, but in many cases it can be beneficial. Reviewing old notes can lead to some striking realizations that would have been lost otherwise.

      If you’re interested, we offer one-on-one educational seminars for the company which highlight which activities the CRA will be looking for in particular.

      Reply
  • As I see it, the biggest issue is the red tape. I currently have enough to do without having to jump through additional hoops. PLease let the CRA hear what we’re saying -it’s absurd how much reporting takes away from runnign my business

    Reply

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