What Happens If You File a SR&ED Claim Without a PCC?

What happens if you file a SR&ED claim without a PCC?

In a recent article, we detailed why you should get a PCC (Pre Claim Consultation) to support your SR&ED Claim.  In this article, we'll detail what happens if you ignore that advice and file without a PCC.  

tl;dr: it's quite possible nothing will happen.  Many SR&ED claims are filed without a PCC and, if the documentation is done and the guidelines are followed, they are often successful.  Now let's talk about what could happen. 

What could happen?

Well, the most obvious thing that could happen is you get turned down.  Let's talk about why.

1. CRA could determine that your claim does not have adequate scientific uncertainty.  This is very different from general uncertainty, or market uncertainty.  CRA needs to be convinced that your claim meets the standard of scientific uncertainty.  With a PCC, they determine this before you do much work.

2. CRA could determine that your methods did not amount to Systematic Investigation, which is required for an SR&ED claim.  The work should aim to achieve an advancement in a field of science or technology. This could involve creating new knowledge, improving existing technology, or solving technological challenges not already documented in industry knowledge.  A PCC assesses this before you do much work.

3. CRA could determine that your project is not likely to achieve Scientific or Technological Advancement.  The work should aim to achieve an advancement in a field of science or technology. This could involve creating new knowledge, improving existing technology, or solving technological challenges not already documented in industry knowledge.  A PCC helps assess whether your project will satisfy CRA as to the advancements it might achieve.

4. CRA could determine that your documentation is inadequate.  You need to document your hypothesis, experimentation, testing, and analysis. This includes records such as project plans, test logs, progress reports, and results, which demonstrate that you followed a systematic process.  A PCC will help you understand what documentation will satisfy CRA, and you will have a chance to present your documentation processes to a CRA Technical Reviewer before filing your claim.

5. CRA might be satisfied with all of the previous points, but may determine that your project has no Eligible Expenditures.  Only certain expenditures qualify for SR&ED and a PCC helps you understand if your expenditures meet CRA's criteria.

Does this mean I'll be turned down?

Maybe, but not necessarily.  As we mentioned earlier, there are many claims filed without a PCC and many are successful.  The question in front of you is simply, "Why take this risk?"  A PCC costs nothing and takes almost all the risk out of an SR&ED claim.  

Dymergent has a long history of getting successful PCCs for clients, at no cost whatsoever to the client.  With a successful PCC in hand, we have never been turned down for an SR&ED claim.  That's right, our record is 100% success.  We'd be happy to talk about getting a PCC for your company, at no cost to you until you receive money from SR&ED.