Once a SR&ED team reaches a level of meaningful financial return, it becomes a pawn for the political games.
Be warned, however. There is one vital stakeholder that is almost always overlooked in these games-playing scenarios, because that stakeholder is external to every claimant: the Canada Revenue Agency (CRA), which is responsible for assessing every claim made. The CRA is very clear in its preferences – they want to see a claimant’s SR&ED function located within the technology area for any claimant. This is because the “science” aspects of the claim are required to drive every other aspect of it, and the determination of eligible activity needs to be led by the people who do the technical work, and who understand the nature of the technological uncertainties.
Any organization that does not locate SR&ED within its technical domains will be subject to higher levels of mistrust and scrutiny from CRA Science Reviewers, based on the CRA’s fundamental suspicion that financial or taxation teams leading a SR&ED effort will inevitably over-claim because they lack the foundational technical knowledge to discriminate between the eligible and ineligible.
It should be understood, therefore, that any move to reposition SR&ED outside the technical domains of a company is inherently risky, and potentially damaging to the perception and effectiveness of the program itself.
Will this knowledge alter the behaviour of the corporate games players? Probably not. But it may be food for thought.
So… let the games begin.
Bruce Madole