Canada’s generous SR&ED program is a key driver in technological innovation.
Like all government programs, it is subject to change, as regulatory frameworks are altered and adapted to meet the current political and economic situation.
This post summarizes recent changes to the program that may impact your application. By staying informed about the latest updates to the CRA’s SR&ED program, you can reduce the chances that your application will be delayed or turned down.
Read on to find out how the recent changes to the SR&ED program will affect your organization.
Who is affected by the latest updates?
At the end of January, the Government of Canada announced updates intended to increase clarity and consistency in language and formatting.
These amendments are also intended to take account of changes to income tax regulations.
Another amendment affects organizations who have taken loans from public authorities in Canada and who have deducted government assistance from their claim.
These changes should make the application process simpler and fairer.
How did the SR&ED policy change in January 2025?
CRA updated three policies:
- SR&ED salary or wages policy
- SR&ED filing requirements policy
- gross negligence penalty on overstated SR&ED claims policy
Change to salary or wages policy: Information about proration of salary or wages for work carried on outside Canada before 25 February 2008 was removed because it’s no longer needed.
Change to filing requirement policy: All references to the covid-19 pandemic have been removed. Clarification added about deadlines for the use of the pool of deductible SR&ED expenditures and claim preparer information.
Change to gross negligence penalty on overstated SR&ED claims policy: Added clarification about how a gross negligence penalty applies on an incorrect SR&ED claim.
The CRA also amended the definition of government assistance so that it no longer includes loans with reasonable repayment terms from public authorities in Canada. Claimants who have previously deducted government assistance may be able to submit an amended tax return.
You can read more about these changes on the CRA’s SR&ED updates page.
How do these changes affect my SR&ED claim?
We recommend reviewing your claims to check your documentation against these new guidelines. If you have questions about how these new rules apply to your SR&ED claim, it’s best to seek professional advice.
By speaking with an experienced Canadian SR&ED claims consultant, you can get assurance that your application is correct, and you are maintaining your documentation to the required standards. If you need to amend your tax return, an SR&ED claims accountant can help with that.
Staying on top of regulations as they apply to SR&ED will help ensure your claim goes through without a hitch.
Getting support with your SR&ED claim
Canada’s tax system is one of the most sophisticated in the world, and savvy businesses take advice as they navigate it.
If you think these updates have affected your SR&ED application, talk to us. With our proven track record as SR&ED consultants in Canada, we are ideally placed to guide you through the process, ensuring your claim is processed efficiently and without undue delay.
Think you need to review your SR&ED application? Get in touch: we can help.
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