As Canadian companies gear up to submit their SR&ED claims by the end of June, experienced teams often make a risky assumption: that past success guarantees future approvals.
“We’ve been approved every year, so we must be eligible.”
“This project is basically the same as last year.”
“We’ve already been through a successful CRA audit; they understand our technology.”
While these common mindsets are understandable, each represents a misconception that can expose claims to review, reduction, or denial. The SR&ED program evaluates each project in each tax year independently, based on documentation, technological uncertainty, and evidence of systematic investigation. Subtle changes in scope, technical challenges, or supporting evidence can materially affect a claim even when the work appears familiar.
Below, we break down each assumption, explain why it can be risky, and offer guidance for preparing defensible SR&ED claims.
Misconception 1: “We’ve been approved every year, so we must be eligible.”
Reality: Past approvals do not guarantee future eligibility.
It’s tempting to assume that a history of approvals will carry over. However, SR&ED guidelines, definitions, and CRA interpretations evolve over time, including how “industry standard practice” is applied. Claims that met expectations in one year may face stricter scrutiny the next, because the framework for evaluating technological uncertainty and documentation is continually refined.
Recent CRA updates and the 2024 SR&ED program review have emphasized the importance of detailed, contemporaneous documentation linking activities to technological uncertainty. Previously, claims with broad, high-level descriptions sometimes passed if supporting evidence allowed reviewers to interpret the work in context. Under current expectations, claims lacking specific evidence distinguishing eligible work from routine operations are more likely to be pulled for review, adjusted, or denied.
This is especially relevant to those whose prior claims have all been Accepted As Filed. A claim being Accepted As Filed does not mean it has received a thorough review. It means it was accepted after an initial review under reduced scrutiny. Over reliance on claims being Accepted As Filed can lead claimants to neglect proper documentation practices, which is dangerous, especially if they have not yet been through an audit.
Even experienced claimants should treat each claim on its own merits. Assuming that past success guarantees future approval can leave a claim underprepared and exposed to risk.
Misconception 2: “This project is basically the same as last year.”
Reality: Similarity does not equal eligibility.
At the core of SR&ED eligibility is technological advancement. If a project were truly identical to last year’s work, with no remaining uncertainties or need for further advancement, it would not qualify.
Continuous or multi-year SR&ED claims exist, but eligibility is based on unresolved technological uncertainties at the end of the previous fiscal year, not on similarity to prior work. Continued experimentation and systematic investigation are required to advance the technology.
For example, a lab continues a project to develop a new metallic alloy for a product. Last year, they analyzed the properties of different alloys, made prototypes to compare how those properties affected their product, and determined that one alloy was the best. This year, they wanted to know if that alloy would be good for another similar product they also produce. After one test, they determined that, yes, it was applicable. Though the same information was gained each year, only the first year shows a systematic investigation that results in a technological advancement and is therefore the only claim likely to be accepted.
Claims relying on past similarity, rather than demonstrating new challenges and how they were addressed, are more likely to face scrutiny. Every year’s claim must clearly show why the work was necessary to achieve further technological advancement.
Misconception 3: “We’ve already been through a successful CRA audit; they understand our technology.”
Reality: Each reviewer evaluates claims independently.
Some claimants assume the same reviewer looks at their claim year after year. In reality, your SR&ED reviewer this year is unlikely to be the same person who reviewed last year’s claim. Since reviewers can now be nationally assigned based on expertise, they may even be in a different province.
Even before this change, reviewers rotated regularly through teams and offices. Each claim is assessed based on the documentation and justification presented in that fiscal year, not on accumulated familiarity. Assuming continuity can lead to under-prepared submissions and increase the risk of findings that require adjustments or additional support.
Takeaway
Each SR&ED claim must be supported by current, detailed documentation and clear evidence of technological advancement. Relying on prior approvals, perceived project similarity, or past audit familiarity increases the risk of review adjustments, reductions, or denials.
Experienced claimants should view SR&ED as an evolving process, not a checkbox. Reviewing each claim independently, documenting technological uncertainties, and validating eligibility each year can help avoid surprises and strengthen defensibility. When in doubt, consider a conversation or eligibility check with a qualified advisor to ensure your claim aligns with current expectations.
Want to validate your approach?
Download our SR&ED 101 Guide for a practical breakdown of current eligibility criteria, documentation best practices, and common compliance pitfalls; so you can be confident your SR&ED claims remain accurate, defensible, and fully compliant year over year.
