How the CRA is Supporting Innovation During COVID-19
In recent years, the CRA had cracked down on SR&ED claims with those under review receiving less than expected. In response to the hard times brought about by COVID-19, the CRA has reversed this course of action, working hard to support the tech community.
As people were told to stay at home, companies had to adapt and incorporate digital options for employees and customers. Work from home and shop from home became increasingly popular, with intentions of reducing the spread of the virus. But these adaptations don’t just happen. Companies must commit to some R&D if they want to revamp themselves for the online world. Other companies even developed solutions from the ground up to help companies adapt. This rapid change towards a more online world showed an uptick in obvious SR&ED. The CRA has worked hard to help the tech community throughout this.
The CRA is ensuring that companies who qualify for SR&ED tax credits receive the funds they are entitled to. They are also further reducing the number of reviews, helping companies to focus on their employees’ health and safety and the protocols needed to protect them. In 2018, less than 50% of companies selected for review got more than half of what they claimed. In 2020, a client under review had 70% chance of receiving more than half of what they claimed. It seems the CRA has incorporated a more consistent review process, accepting a greater value for credits. COVID has led to an economic crisis and as such, it is important for innovation to be supported.