Posts Tagged ‘sred information’

Along with the other changes that the CRA has been implementing over the past couple years, the Claim Review Manual has been updated. This is the manual that tells the CRA reviewers what processes they need to follow when reviewing an SR&ED claim. This review manual is meant to make the review process more consistent from review to review, and from reviewer to reviewer. It sets out clear guidelines as to what is to happen in a review, and what kind of timeline the reviewer should be following when working on a claim. The manual is also supposed to increase the co-ordination between the technical and financial reviewers, and to increase the communication quality between the reviewer and you (the claimant).

The CRA’s website has laid out the steps to a review, as listed in the CRA Review Manual. A brief overview follows:

1. Preparing and planning:
   • Reviewing your claim
   • Identifying issues with your claim (ie – areas they are unsure can be considered SR&ED)
   • Making first contact with you
2. Conducting a site visit:
   • Preparing for the review (the reviewer will contact you by phone or letter to discuss when the review will happen)
   • Preliminary review work (interviewing any possible staff involved with the SR&ED work, explaining the SR&ED program, etc)
   • On-site review (tour of the facilities, interviewing staff involved in the SR&ED work, reviewing supporting documentation)
   • Request for more information to be sent to the CRA reviewer
   • Communication of preliminary decisions (if possible, the reviewer will let you know what kind of results to expect from your claim submission)
3. Finalizing results:
   • SR&ED review report (prepared by the CRA for you, to allow you to review it and provide any new information if you disagree with their assessment)
   • Finalization of technical and financial reports (these reports will be sent to you by mail, be delivered in a meeting, or discussed over the phone)
   • Dispute resolution (if you disagree with the CRA’s final report)
   • Appeals process

Many people get concerned when looking into the SR&ED program about how safe their trade secrets are. One of the key components of the SR&ED program is that you are faced with technological obstacles that don’t currently have any known methods to solving these problems – and in claiming for the SR&ED program, you’re going to need to cover how you overcame these obstacles. It’s only natural that you are going to be worried that what you worked hard to discover could be easily made known to your competition.

But the reality of the situation is that your trade secrets are safe and are kept completely confidential.

First of all, the CRA only looks as deep as it needs to, in order to discover whether your SR&ED projects qualify for the program – they only looks to see that there are technological obstacles, technological advancement and technical content. It isn’t always necessary for the CRA to look at the exact principles of your projects – when it is necessary, they maintain the strictest of confidentiality. In fact, the CRA has put rules and legislative precautions in place in order to protect your confidentiality.

If you are working with a consultant to prepare your SR&ED claim, your consultant should also maintain the strictest confidentiality with your technologies and intellectual property. If you have any concerns that these may not be the case, a standard non-disclosure agreement should be signed to the respect.

So, it is indeed a myth that your trade secrets aren’t safe when claiming for the SR&ED program, and this should not be a reason why you don’t consider filing for the SR&ED program.

A press release has been issued about some upcoming changes to the SR&ED program. A few points mentioned by Minister Blackburn today, while addressing the 13th Annual Tax Practitioner Information Session, relate to upcoming changes to the SR&ED program:

• starting on April 1st, 2010, reviewers will be spending more time explaining the program (requirements, application process, decisions made, etc) to claimants. Starting on the same date, if the CRA finds a company is missing eligible projects, they will let that company know sooner so they can resubmit their claim within the filing deadline.
• beginning in July, the CRA will be posting quarterly reports on their website as to how long it takes for them to review an SR&ED claim from start to finish.

These changes are a result of some of the feedback they have been receiving about the SR&ED program lately, especially in relation to the consistency of the program.

Minister Blackburn has also said that there will be more changes to the program in the future – we will be reporting on these changes as soon as we have word about them.