2013 was definitely a big year for the Scientific Research & Experimental Development (“SR&ED” or “SRED”) Tax Credit community. We kept you informed over the past year on the hot topics through our BeneFACT company blog, but we think the New Year is an excellent time to look back at the Top 5 most important developments of 2013 in SR&ED.
December 31st, 2013 was sad day in the world of SR&ED, but the idea of phasing out capital expenditures is not a new idea. There has been difficulty with getting capital expenditures approved for quite some time, and companies were given plenty of opportunity to purchase and prepare for use any equipment between when the elimination was announced and implementation of the amendment. Still, any cuts to the program will definitely sting a bit.
One of the major goals that CRA seems to be following up on is the idea of more transparency within the program, including what is SR&ED eligible and what is not. This was most evident in the release of 10 SR&ED Case Examples in September.
Here are the 3 major aspects outlined in the examples:
The CRA requested feedback from the SR&ED community on these examples, and BeneFACT offered up our own thoughts, which are outlined in a previous post. The examples have been taken down from the CRA website, so we will just have to wait to see how it all pans out!
The Formal Pre-Approval Process pilot project was first discussed back in January in the hope to improve the predictability of SR&ED outcomes for claimants. The CRA asked for assistance in putting the project together, and companies were requested to participate in the pilot (participation based on certain criteria). Throughout the pilot, claimants would work with the CRA in determining eligibility. Greater predictability would greatly benefit the claimant as it would reduce post filing and onsite reviews – a practice that takes precious time away from the claimant’s main core competencies.
This pilot was initially launched at the beginning of the year, and in June the CRA once again asked for more participants.
We waited all October with bated breath for the arrival of the T661 revision (T661(13)), and CRA delivered – as promised – the new T661(13) on October 31st. The CRA proposed the new form in the 2013 Federal budget, “…to be consistent with the consolidated SR&ED policy documents released in December 2012”.
Last, but definitely not least, in our 5 Top Scientific Research & Experimental Development News Events of 2013 is the focus of SR&ED in the Economic Action Plan. Announced by Jim Flaherty back in June, the Economic Action Plan mentioned greater transparency within the program, funding put toward outreach to first time claimants, changes to the T661 (as we discussed above), and funding toward resources on reviews for SR&ED claims with a high-risk of non-compliance. It definitely set the tone for the direction that SR&ED is taking into 2014.