How to write uncertainties for SR&ED

Writing the technical description of a SR & ED project should not be taken lightly. It is true that the descriptions included on T661 Form are not always read by the RTAs. But when they are read, these descriptions make the difference between convincing the RTAs of the eligibility of your project and … the audit meeting.

In previous blogs, we presented some of the most common project positioning errors, we made general comments on the positioning and writing of SR & ED project descriptions. We now turn our attention to the heart of what will form your T661 Form: line 242 is where you detail the technological uncertainties that are the core of your argument, why you believe your project is SR & ED.

It is such a vast subject that we shall come back to it again and again in future articles. Today we are talking about managing the available space. We have only 350 words to convince the reader in this key section. We must therefore be precise and complete.

Remember that the CRA provides its T4088 guide to explain what to put in T661 Form. This is a good presentation of WHAT to say. Following is our presentation of HOW to produce this content.

Uncertainties

“What scientific or technological uncertainties have you tried to overcome? “. To determine SR & ED, one must first show that there are uncertainties that can not be eliminated by standard practice. You must therefore limit yourself to presenting the scientific or technological side of the project. It’s no time to talk about the customer’s constraints, nor those of the products or of the commercial environment. Make good use of the limited space available if you nail down these four important elements: the context, the objectives, the knowledge base and the uncertainties.

1- Context (max one sentence per following item)

1. Start with a (very) brief introduction to the business context, project and objectives,
2. Clearly state the technological scope of your project. What do you want to do with the technology?
3. Formulate a high-level description of the technology project,
4. If the project is a continuation of last year, indicate the level of technology reached at the end of the previous year and what you will be focusing on this year.

2- Technological objectives

1. Technological objectives can be expressed in terms of:
   • New technological capabilities integrated into the product or process being developed,
   • Progress in the application of technology, eg.: use in new areas, under different conditions, etc.
2. Specify how each objective relates to the technology (not business).
3. The stated technological objectives must be precise and measurable.
   • Identify the key indicators or measures you will use to determine whether you are meeting the technological goals.
   • Indicate, for each of these indicators, the initial measure and the target.

3- Knowledge base / current practice

One of the most common arguments used by the RTAs is to reject the claimed project by declaring it to be standard practice. This is your chance, you have a few lines here to define what you think is the standard practice. Remember, everything is a matter of point of view and perception. It is up to you, here, to properly position the relevant angle to grasp your vision.

1. Explain what your company could do with the technology before SR & ED was started or what the technology was capable of at the beginning of the project.
2. What were the technological limitations of your products or processes to overcome before starting your project?
   • For an experimental development project (90% of SR & ED claims), this means attempting to exceed or increase the knowledge base or technology. Identify the technological barrier (s) encountered at the outset.
   • If your project was more of a scientific research, give a perspective in terms of the scientific knowledge you were looking for before starting your work.
3. Experimental development work should be undertaken with the aim of seeking technological progress. Your definition of the knowledge base must therefore highlight the progress sought:
   • Example: We want to increase the performance of the X component by 20% in the Y context, and increase the reliability of the results to 99%.
   • An overly broad definition of the knowledge base is useless (eg. we want to advance mechanical engineering in the factory).
4. You can use the information you provided the previous year if your project is a continuation and if the objectives are not met or are unchanged.

4- Formulate the uncertainties

1. Each uncertainty must be related to the ability or not to achieve a technological objective defined above.
2. What problems have you tried to resolve and for which the uncertainty resolution approach is unknown and can not be determined on the basis of your technology or based on your knowledge base.
3. Clearly identify all the technological uncertainties, obstacles and difficulties encountered, and for each of them:
   • The underlying technological limitation (why it is uncertain),
   • The limited technology and what we seek to advance,
   • The current practice and why it fails to resolve this limitation.
4. Were the problems caused by design constraints that you had to overcome? What constraints?
5. Include enough details to show that these issues were not routine problems.
6. Often the obstacle was not clearly defined before the experiment. It is often preferable to specify technological uncertainty only through the experimental process rather than at the beginning of the work.

And you, do you have any comments or recommendations on how to write SR & ED uncertainties in order to convince the CRA RTAs? Did you like your reading? Tell us so. What should be added? What topics are you interested in? You did not like this reading? Tell us so. What is it you did not appreciate in this text?

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