Illustrating key concepts in eligibility

CRA have posted ten examples intended to illustrate concepts from the Eligibility Policy paper. Comments on their “clarity, readability and completeness” are invited until November 18th. 

Some of the examples cover familiar aspects of uncertainty or advancement, explaining that - uncertainty may arise through limitations in the technology (example #2); constraints such as cost can give rise to technological uncertainty (#3); applying known techniques is standard practice (#4); design change is not advancement (#7). Example #10 describes a SR&ED project that is a subset of a company project.

Some of the examples clarify current CRA policy. Example #5 describes a scenario that naturally leads to a hypothesis being formed (although it doesn’t extend to why the natural next step would be to document it). Example #6 clarifies that work failing to demonstrate ‘scientific method’ risks being dismissed as ‘trial and error’. Example #1 endorses the practice, recently adopted by some RTAs, of using the term ‘technical problem’ when work is considered to be standard practice, and ‘technological challenge’ when work is accepted as SR&ED. (This is not so much an explanation, rather a statement of intent about how the terms are to be used.) 

Examples 8 and 9 are potentially confusing when looked at side by side. Example #8 describes how testing and data collection that is partly in support of SR&ED may be pro rated for a claim. In Example #9, case 1, there is again testing and data collection that is used in part for SR&ED, but in this case all of the routine work is disallowed. No distinction between these cases is made clear. 

This set of examples is presumably the first of many, since CRA’s response to requests for more detailed, sector-specific advice has been that additional guidance would be provided through examples.