SR&ED and Contemporaneous Documentation

Timing: Documentation must be created and maintained at the time the work is being conducted or shortly thereafter. This ensures that records are a true reflection of the R&D work, rather than reconstructed later.

Nature of Documentation: This includes records like:
o Project plans, timelines, and descriptions of the R&D activities.
o Detailed technical documentation, such as experimental designs, testing procedures, and technical problem-solving processes.
o Financial records (e.g., timesheets, invoices) for costs incurred during the R&D.
o Correspondence or internal notes that show the decision-making process.

Type of Work: The documentation should show that the work meets the criteria for eligible R&D activities, which involve the systematic investigation or experimentation aimed at achieving scientific or technological advancements.

Supporting Evidence: The CRA expects that claims are supported by clear evidence that the activities were done in line with R&D objectives and the methods were appropriate. This means detailed documentation of hypotheses, experiments, results, and challenges faced.

Avoiding Retroactive Documentation: Retroactive documentation—where records are created after the fact to support claims—will not be accepted as sufficient evidence.