In any larger organization, it can be difficult to sift through the complete list of projects and expenditures to arrive at potential SR&ED claims, assuming that you have the access and authority to do so. Even then, typically, you don’t have the resources to identify and claim everything. Maximizing the return on your efforts usually means that you will select the projects that combine the greatest expenditures and the strongest technical case – the “low-hanging fruit”.
If a SR&ED program is just starting out within a large company, needing to prove itself, for example, or resource constraints or timing (e.g. the proximity of a filing deadline) dictates a more selective approach to claiming, then it’s time to go after the most defensible and largest claims... those low-hanging fruit again. In some respects, this scenario represents the earliest stage in the evolution of a corporate SR&ED program. However, if it’s done correctly, then the results can be spectacular.
Start by building a list of the technical projects, ranked top down by order of expense. Then talk to the project managers and technical leads who worked on those projects, and take them through a quick, high-level assessment of the technological barriers, pain points, challenges, etc., and a discussion of the SR&ED criteria: technological uncertainty, technological advancement, and experimental work performed. Include in this list any and all projects that failed for technical reasons. (By this I mean, include a project where technical or performance or quality goals or metrics were not met, but do not include a project where the failure was due to a perceived lack of market acceptance.)
From this shorter list of high value projects, assess the availability and the quality of supporting evidence, as well as the availability of additional potential sources of such supporting evidence.
The point here is that the people who did the technical work may or may not have kept records about their activities, their challenges, the time reporting, etc. If they did, and the records are useful, that’s great. If they didn’t well ... you’ve still got access to the people themselves, right?
To be continued...
Bruce Madole