Has your SR&ED claim rejected due to lack of documentation?

So, your SR&ED claim has just been rejected due to the following reasons:

1. Lack of Documentation
2. Projects don’t qualify

Your excuse for number 1, IT’S TOO TIME-CONSUMING TO DOCUMENT FOR SR&ED CLAIM. We’d rather focus on our deliverables, than track our time.

Think of it this way – if you invest 10 minutes each week logging hours and jotting bullet point notes, you would be spending effectively about 8 man hrs (1 day) per year for tracking. This simply can get you back the much deserved and needed SR&ED refund to help grow your company’s R&D.

Having a proper documentation system in place can not only help save you valuable time when preparing your SR&ED claim, but it will also maximize your claims and make your claim stronger if audited by the CRA. It is indeed very time consuming to think back and piece together the information relating to a project that occurred as far as 1.5 years ago. Some companies end up missing their deadlines, and missing out on a much-needed refund, simply because they did not have enough time to retrieve all the information needed.

So then you ask – what do we track and how? We do not specialize in ‘Documentation’!

Supporting the SR&ED work claimed.

As per EVAMAX’s experience, most often, supporting evidence is in the form of contemporaneous documents (i.e., documents generated as the SR&ED was being carried out). In fact, contemporaneous documentation that is dated, signed, and specific to the work performed is the best supporting evidence that you can provide.

How do I manage SR&ED Documentation?

That’s where our expertise comes in.

With extensive experience with the SR&ED program, we have developed for our customers, QUICK & SIMPLE Tracking methods customizable to each unique company to stay on top of the SR&ED documentation.

1. Use our Simple web-based tracking software R&D Maximizer – to capture all SR&ED activities and costs to guarantee maximization of R&D claims.

2. Good old Excel Templates that can be optimized for your R&D tracking needs.

3. And yes, don’t be bogged down by the one-time claim rejection. If you can demonstrate to the CRA that you are working to be compliant, you can qualify for SR&ED Claims in future.

Your claim has been rejected once, then why should you continue to track R&D?

Tracking to Maximize your SR&ED benefits:

Simple documentation never goes to waste. It can help establish a strong knowledge base and simplify processes for your company, so you never have to re-invent the wheel!

The better tracking you have, the more information your SR&ED consultants can retrieve and prepare stronger reports and stronger defense for the claim.

Hence, by documenting the work done, you can improve the chances of acceptance of the claim as qualified work.

Filing requirements

To make a claim for Scientific Research and Experimental Development (SR&ED) tax incentives, you have to file an income tax return, along with the following forms:

  • Form T661 Scientific Research and Experimental Development (SR&ED) Expenditures Claim, and one of the following two forms:
  • Schedule T2SCH31 Investment Tax Credit – Corporations; or
  • Form T2038 (IND) Investment Tax Credits (Individuals).

You have to file the application forms by your reporting deadline.

You are required to keep complete and organized records that support the expenditures claimed. Requirements for records needed to support financial transactions are set out in Guide RC4409, Keeping Records. Typical financial records and documents that may be requested during the financial review include financial statements and records, ledgers, journals, and vouchers. Source documents such as receipts, contracts, and general correspondence may also be requested.


Learn more about SR&ED Program and EVAMAX SR&ED Consulting Services. You may also, send an email now or call us at 1-877-711-7733

Like this article?

Leave a comment