• Last Updated:
  • Oct 30th, 2018 10:30 am
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[OP]
Newbie
Aug 22, 2017
25 posts
3 upvotes

Filing SR&ED Claim yourself

I'm not exactly an entrepreneur, but I work as a Product Manager at a small company based in BC. For 2017 we went through an external consultant to file our SR&ED claim, and got it approved. This partner essentially was a 2-man team, but as the magnitude of our projects has grown and they show reluctance with filing certain things for us (e.g. software development) we feel they aren't not the best pick for us anymore going forward. We claimed $20K in 2017, and expect about $200K in eligible SR&ED expenditures for 2018+2019.

Does anyone here have any experience with SR&ED claims? Is it possible to do it yourself? I don't really know too much about what goes on behind the scenes but is it possible for me to learn this kind of stuff over the course of a few months? Looking at the rates most SR&ED consultants charge, doing it in-house could easily save us 10s of $K per year. We already supplied all the technical + financial documentation ourselves for the 2017 claim - we only received help with going from this documentation to SR&ED acceptance.
6 replies
Member
Nov 12, 2014
446 posts
248 upvotes
Kingston, ON
You can but it's a heavily audited area so be prepared for that and you better know what you're doing lol
[OP]
Newbie
Aug 22, 2017
25 posts
3 upvotes
QN5252 wrote:
Oct 26th, 2018 2:57 pm
You can but it's a heavily audited area so be prepared for that and you better know what you're doing lol
Yeah - from what the consultant told us, they usually audit 20% of the businesses each year, and eventually will audit everyone at least once. I do feel we're prepared for an audit - all product iterations we develop are datemarked and kept around. I Keep log files, any notes, meeting minutes, analytics data, etc. I feel audits are not really the responsibility of the consultant anyway...

I don't have a financial background though, so I'm more worried about whether we have enough knowledge to file all the paperwork correctly.
Deal Expert
Aug 22, 2011
23213 posts
9666 upvotes
Ottawa
I have assisted my finance team on completing the SR&ED claims,
We've been audited several times and it was nothing more than an entire morning spent with a CRA auditor going through our paper trail.

Use the provided tools from CRA to help you get started.
https://www.canada.ca/en/revenue-agency ... tools.html
[OP]
Newbie
Aug 22, 2017
25 posts
3 upvotes
vkizzle wrote:
Oct 26th, 2018 4:12 pm
I have assisted my finance team on completing the SR&ED claims,
We've been audited several times and it was nothing more than an entire morning spent with a CRA auditor going through our paper trail.

Use the provided tools from CRA to help you get started.
https://www.canada.ca/en/revenue-agency ... tools.html
Do they give notice that you will be audited? Or do they just randomly appear on your doorstep one morning, asking for all your paperwork?
Deal Expert
Aug 22, 2011
23213 posts
9666 upvotes
Ottawa
Vitesze wrote:
Oct 26th, 2018 6:48 pm
Do they give notice that you will be audited? Or do they just randomly appear on your doorstep one morning, asking for all your paperwork?
They will contact you in advance to arrange a meeting.
The auditor is generally someone with knowledge in your specific industry.

From our experience, the more you claim the more it will go through scrutiny.
Deal Addict
Jul 3, 2017
3023 posts
2052 upvotes
We did a couple of multi-year claims. We had our regular accounting consultant help us with the paperwork since it's quite extensive. The CRA showed up once to audit us, with a few days notice. We had all the paperwork in order, so our accountant didn't attend.

The CRA rep said "You don't need an expert accountant to prepare a SR&ED claim, we don't know why everyone says that, we don't recommend it", and then he proceeded to discuss details of our claim in language that might as well have been Greek to us, even though we all have decades of informal accounting experience. So yes, use an accountant.

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