Thinking about preparing your SR & ED claim without using a consultant ? Several RTA’s openly recommend preparing your claims by yourself. What is this? an opportunity or a risk?
1 Doing it yourself: the benefits
1.1 More money in your pockets
The main advantage is that there is no consulting fee. This represents savings of 10 to 30% of the total credits depending on the signed agreement. This is a very significant and recurring amount. You can reallocate that money on other innovation activities, or just to increase your profitability.
1.2 Accept the invitation of the ARC
The CRA has repeatedly revised the SR & ED program in recent years. Documentation and simplified forms should reduce the need to use professional specialists to claim the SR & ED. Why not take this opportunity if the CRA encourages innovation while simplifying use of the program?
Partagez ce Tweet SVP1.3 Train yourself for SR & ED
The consultants synthesize large amounts of information in a few key words within the space constraints of the T661. But they do not have the deep knowledge of the technology that have, for example, your engineers assigned to the project. Your employees can learn the concepts of the SR & ED and understand what can be claimed or not. This knowledge will be used again in the coming years.
These advantages are quite obvious in theory. But if you consider to prepare your claim by yourself you have to be aware of the risks associated with this approach.
2 Doing it yourself: the risks and disadvantages
2.1 Making better use of skills
Your personnel are passionate about their technology, but not about writing descriptions and completing forms. You need a lot of skills and to understand a lot of subtleties to prepare a SR & ED claim. Otherwise you run the risk of costly checks. On the other hand, it would be worth rethinking the distribution of certain tasks. For example, the claimant may better explain its technology, collect relevant information for writing and producing a list describing the work performed, etc. You leave the “dirty job” to the consultant : to fill the forms and to complete the technical details.
2.2 Results or process
You are focused on results, on what you want to provide your customers with your technologies. Ultimately, the process followed does not really matter as long as you get the results. But the CRA requires to see a systematic process contemporaneously documented. This is an additional task that can be seen as unnecessary by many employees. A consultant constantly questions your experimental process and he can document it, freeing your most important and productive resources of a task they often hate: documenting processes, and projects, especially those performed in the past …
2.3 Present vs. Future
You are constantly focused on the present and the future of your customers and your technologies. You select your employees based on the same criteria. Claiming a SR&ED file requires to focus on the past – not the future -, which is contrary to the qualities sought in your team. It is even often competing for the time required to meet your customers or to develop your technology.
2.4 Writing a text ??
Several technical specialists love to “prototype” with their technology in their test environment. Many love to program (write code in an exotic language), but the thought of writing texts horrifies them. Even keeping a laboratory notebook (without complete sentences) is a burden for them. They’ll push it back to Friday night and will often forget it … The consultants are selected based on their ability and motivation to produce technical texts to meet CRA requirements. Preparing a technical text is an art that they practice daily. They insert their own technological knowledge to their knowledge of the evolution of the SR & ED program.
2.5 No time
Your most talented employees are normally those who do not have available time. They are your key experts who can understand and explain your technological uncertainties. Writing their experimental activities adds to their busy schedule. You can, of course, compel them to do so. But if instead you take it away from them it will relieve them from the burden and make them grateful.
2.6 Staff turnover
We have lost count of our client’s internal resources we have trained to SR & ED, but who were gone the next year, or the one after. We must redo the training … or use a consultant. In addition, on the day of the CRA audit, the consultant who wrote your description is often the best option to help you prepare your defense.
3 Conclusion : Use a SR&ED consultant
Some RTAs recommend that you prepare your claim description by yourself. In the context of today’s challenging requirements, I say they have no idea about what preparing the write-up is all about. It is so much easier to comment on a text as compared to writing it up from scratch.
A redefinition of roles might be enough to optimize the claim preparation process. Before you start, make sure you clearly specify to your consultant the anticipated level of involvement of each one in the process. If you get involved deeply, ask them if they offer a review service of your claim on a per hour or fixed fee basis. This is sometimes all you need.
And you what do you think ? What are your experiences of self-preparation of your claims? Have you been audited for these claims? Do you have any recommendations to share?
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