Doing SR&ED Claims More Efficiently

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SR&ED stands for Scientific Research and Experimental Development (SR&ED). SR&ED is a tax incentive for completing scientific research and experimental development.

Usually they come in the form of a tax deduction, investment tax credit or a direct refund. The Canada Revenue Agency is the department responsible for administering it and as every Canadian knows they can be sticklers!

If you don’t do the upfront work and create the needed systems to document time, failures, and learnings you will have a very difficult time making a good claim and a really difficult time standing in front of a CRA auditor.

Time Tracking

It’s really important to setup time tracking right at the start of a project so that you don’t leak any time and get the full benefits of the SR&ED credit.

Team members need to log their time every day against what they are working on. There’s a multitude of reasons this is a good idea, but for the purposes of this article it’s really important because the CRA will ask what they were working on and how many hours they worked that year.

The objective of this shouldn’t be to log 100% of the developers time, but it should be possible to log a lot of it. Projects and tasks in requirements, design, development, deployment and operations should definitely be logged.

Documentation

A company that I worked at early in my career made me document every day something that I struggled with or learned. It’s only been in the last few years, I’ve realized what that was so important.

Logging what you are learning, struggling with, and even found almost impossible to resolve is a great way to build up a great SR&ED claim. Not only that it can make some really useful blog content!

Automation

Creating SR&ED reports is really tedious and almost impossible if you don’t do the upfront data collection which should include hours spent, and any software engineering artifacts (diagrams, business requirements documents, etc).

SR&ED Consultants

SR&ED Consultants are really expensive and tend to take a long amount of time to create a report. In a lot of cases, they won’t understand your domain and may produce a report full of unneeded jargon.

A SR&ED consultant that can teach you how to “fish” is a lot more useful than somebody that will produce a report full of technical jargon that won’t stand up with the CRA. A bookkeeper might be a better investment.

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Brian is a programmer and technology leader living in Niagara Falls with more than ten years of development experience. He is passionate about automation, business process re-engineering, and building a better tomorrow.

Brian is a proud father of four: two boys, and two girls and has been happily married to Crystal for more than ten years. From time to time, Brian may post about his faith, his family, and definitely about technology.