One of the shifts occuring in the SR&ED program is to do with timing. Not so long ago, serious consideration of a development project as SR&ED was often left until the work was well under way or complete - until, that is, the nature and extent of the challenges and technological progress had become clear. At filing time the project description would cover advancements made or attempted, obstacles encountered, and a factual account of the work done. The technical reviewer would investigate other aspects of the claim through site visits and meetings with the people who did the work. While claimants were encouraged to keep records of who did what when, and the related costs, it was not expected that such things as theories about what might work would be written down at the beginning of the project.
Times have changed. Over the last few years CRA’s requirements have been evolving, and now that the new policy papers are in effect they are quite clear; a primary characteristic of the SR&ED project as currently explained is that it follows an experimental process referred to as the “scientific method”. This involves the early identification of one or more uncertainties, formulation of hypotheses to reduce or eliminate them, and subsequent testing and modification of the hypotheses, with supporting evidence from records created at the time. In practical terms this means that the point at which attention is first focused on these aspects of the work needs to move forward in time by at least 18 months, and possibly several years - from when the project is written up for a claim, or explained to a CRA technical reviewer, to the time the project begins - so that appropriate records are available to support the claim.
While individual reviewers may still take a more flexible approach, program users ignoring this requirement risk losing credit for otherwise eligible work.
There are CRA services that support early attention to these issues; PCPR (Pre Claim Project Review), Process Review, and especially the proposed formal pre-approval service that is about to be piloted (FPAP).