After you’ve filed your SR&ED claim, there is a bit of a waiting period before you will hear back from the CRA. When that waiting period is done, one of two things may happen – you may hear that your claim has been Accepted as Filed, or the CRA may ask to review your claim with you. There are two different types reviews that can happen: the technical review and the financial review. You may be asked to have one, the other, or both types.
The technical review will look at the SR&ED work that you’ve done, in order to confirm that your projects are eligible. The reviewer will be looking for obstacles, will be looking to see that some sort of advancement in your knowledge has happened, and will be looking to see that you have the documentation to support the obstacles and advancement.
The financial review will look at all of your financial information involved with your SR&ED claim, in order to confirm that you have claimed the correct costs for each project. Again, you will need the proper documentation to support the financial information.
Some consultants and accounting firms shy away from CRA reviews. Some do not guarantee that they will be present with you when your review happens. Northbridge embraces the CRA review for a couple of reasons:
Firstly, especially if this is the first time that you are claiming, the CRA reviewers want to meet with you to make sure you understand the SR&ED program.
Secondly, if a review isn’t requested it is usually because you have claimed less than you could be eligible for.
One last thing to make note of in regards to CRA reviews – having a CRA review does NOT meant that you will get a tax audit. The SR&ED division of the CRA works separately from the tax division, and no information is passed on to the tax division from your SRED claim.