Looking to the Future: SR&ED Tax Credit Program Predictions for 2014

By: BeneFACT Marketing in Uncategorized

January 10th, 2014

The buzzword for 2014: DOCUMENTATION.

SR&ED Predictions for 2014

The SR&ED community witnessed some pretty intense changes to the program this year. These changes included revisions to certain lines and an additional part on the T661, the elimination of capital equipment eligibility, and lowering of the proxy.

But that was 2013. Where do we see the SR&ED Tax Credit program going for 2014?

The biggest trend we should be looking at in 2014 is the increased emphasis on the 5 questions of eligibility the CRA developed and adheres to. As a quick refresher, they are:

  1. Was there a scientific or a technological uncertainty – an uncertainty that could not be removed by standard practice?
  2. Did the effort involve formulation hypotheses specifically aimed at reducing or eliminating the uncertainty?
  3. Was the adopted procedure consistent with the total discipline of the scientific method including formulating, testing, and modifying the hypotheses?
  4. Did the process result in a scientific or technological advancement?
  5. Was a record of the hypotheses tested and the results kept as the work progressed?

The CRA has developed a risk assessment model based on these 5 questions to determine eligibility of a claim. In 2014, it is suspected we will see further importance placed on especially the last point – contemporaneous documentation. SR&ED claim reports must make this a priority.

There are new faces at the CRA this year as the offices have expanded their review team. We’re hoping the result is continued meeting and exceeding of current CRA service guidelines meaning faster process times: A great plus for claimants waiting for their SR&ED benefits.

Finally, let’s talk budget. The thought is that the 2014 budget will be “fairly light” in regards to any dramatic changes to SR&ED. That being said, we should all prepare for 2015. With it being an election year, we predict significant changes to not only SR&ED, but to the innovation agenda in Canada as a whole.

What are your SR&ED predictions for 2014 going into 2015?