SR&ED claims can either be filed along with the tax return for the claim period, or up to one year after the due date of that tax return. For companies with a Dec 31st year-end, the opportunity to claim tax credits for R&D work in 2012 expires in on June 30th. While many program users file their claims at this point in the cycle, there are plenty of reasons why it pays to prepare and file SR&ED claims well in advance:
- Deadlines in the SR&ED program are strictly enforced, so a last-minute delay or mis-direction can mean the claim is lost. At one time CRA had some discretion in this area, but that is now a thing of the past.
- Errors and omissions can also be fatal to the claim, and are more likely when rushing to meet a deadline. CRA will advise of any problems once they see them, but no extra time can be allowed. The agency recommends filing 90 days or more ahead of the deadline to allow for mistakes to be picked up while there is time to correct them.
- Companies that use professional claim preparers should be aware that this is by far their busiest time of year.
- Recently, revisions to the claim form have been made with very little lead-in time; a delayed claim may suddenly be subject to unanticipated filing requirements. The most recent update, for instance, sets out new requirements with respect to advancement and to scientific uncertainty, and these apply even to claims that could have been filed under the old rules.
- When a claim is prepared, or at least planned, while the work is still in progress, it’s possible to address problems such as lack of sufficient supporting evidence. Records have to be generated during the life of the project to qualify as ‘contemporaneous documentation’.
- CRA’s service standard for refundable claims filed along with the current tax return is 120 days. Claims filed later are classed as ‘taxpayer-requested-adjustments’, and the target processing time is extended to 240 days.