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What if this is our first claim and we haven't kept formal R&D records?

Often first-time filers will not have kept detailed records because they wouldn't have known of the SR&ED program when they performed their R&D. Having an experienced team to help you identify the material you may have overlooked that can help support the eligibility of your project can be a real advantage in this situation.

There is an onus on the claimant to be able to substantiate their claims, but the CRA does understand that there may be situations where there is a lack of documentation:

  • In terms of financial documentation, they have prepared a Guidance Document: Allocation of Labour Expenditures for SR&ED that discusses methods of allocating SR&ED labour costs where a formal system of tracking SR&ED costs has not been implemented.
  • In terms of technical documentation, their Guide to Supporting Technical Aspects of a SR&ED Claim states: "claimants may have many existing alternatives to support their claims. These alternatives may take the form of documents (...), discussions or interviews, or prototypes, or new or improved products or processes. It is recommended that both claimants and the CRA be open-minded when selecting methods to support a claim."

It should be noted that while the CRA understands that first-time claimants may not have had formal technical and financial documentation in place for their SR&ED program, future claims are expected to conform to higher standards.