Filing an SR&ED claim is one thing—getting it approved without issues is another. While not every claim gets reviewed, the CRA may request additional details or supporting documentation to verify your claim. The key to passing a CRA review successfully is consistency, coherency, and honesty. Your 3Qs, financial data, and supporting documents must align perfectly—with no gaps or contradictions. This guide explains how to structure your claim properly, what triggers reviews, and how to defend your SR&ED claim with confidence.

1. What Triggers a CRA Review? (Why Some Claims Get Audited)

Not all claims get reviewed, but certain factors increase the chances:✅ First-time filers – If it’s your first SR&ED claim, CRA may review it to ensure compliance.
✅ Large claim amounts – Higher refunds attract more scrutiny.
✅ Weak or vague answers in the 3Qs – If your responses lack technical depth, CRA may request more details.
✅ Inconsistencies between the 3Qs and your financial data – If expenses don’t match the R&D work described.
✅ History of claim adjustments – If your previous SR&ED claims were reduced or denied, CRA may check future ones more closely.

💡 Important: CRA does not require supporting documentation at the time of submission, but they may request it later as part of a review.

2. The Most Important Factor: Consistency & Coherency in Your SR&ED Claim

CRA reviewers want to see a logical, well-documented story that:
✅ Matches your business activities → The R&D work you describe should align with your company’s industry.
✅ Has no gaps between the 3Qs, expenses, and supporting documents → Everything should reinforce the same narrative.
✅ Avoids contradictions → If you claim work on AI research but your financials show no AI-related salaries or subcontractors, that raises red flags.

💡 Best Practice: Before filing, double-check your claim for inconsistencies. Every part of your submission should fit together seamlessly.

3. Proactive Steps to Make Your Claim Audit-Proof

A. Keep Strong Technical Documentation (Your Best Defence in a Review!)

• Project logs & meeting notes → Document technical challenges, discussions, and decisions.
• Test results & experiment data → Show hypothesis testing, iterations, and outcomes.
• Version control (GitHub, Bitbucket, etc.) → Proof of software development progress.
• Prototypes & product iterations → Photos, CAD files, schematics, or videos.

💡 Tip: If CRA asks, you should be able to prove what you worked on at any stage of the project.

B. Track Employee Time Properly (Payroll is the Largest SR&ED Expense—It Must Be Justified!)

• Time-sheets/logs → Prove how much time employees spent on R&D.
• T4 Slips & Pay-stubs → Confirm salaries paid for SR&ED work.
• Job descriptions & contracts → Clearly define R&D roles.

💡 Tip: Founders who work on SR&ED must track their own time too—otherwise, their salaries cannot be claimed.

C. Clearly Define Your Scientific/Technological Uncertainty (Strong 3Qs Reduce Review Risk!)

• Your project must demonstrate a clear knowledge gap.
• Avoid vague descriptions—be specific.
• A strong response to the 3Qs lowers the chance of review.

4. What Happens During a CRA SR&ED Review?

If your claim is selected for review, here’s what to expect:

A. Types of CRA Reviews

🔹 Desk Review → CRA requests additional documentation via email.
🔹 Technical Review → CRA assigns an expert to assess your project’s technical validity.
🔹 Financial Review → CRA examines payroll, subcontractors, and eligible expenses.
🔹 On-Site Review → CRA may visit your office/lab to verify your R&D work.

💡 Tip: Most reviews are resolved through email by submitting supporting documents—on-site visits are rare.

5. How to Respond to a CRA Review Request

Step 1: Read CRA’s Review Letter Carefully

• Identify exactly what they are requesting (technical details, payroll records, financial clarifications).
• Refer back to your 3Qs and ensure your response aligns with your claim.

Step 2: Gather & Submit Supporting Documentation

• Send clear, well-organized files (logs, test data, timesheets, expenses).
• Explain your R&D process in simple, factual language—don’t assume CRA will “figure it out.”
• Be concise and to the point—don’t overwhelm with unnecessary details.

💡 Tip: If CRA asks a vague question like “Explain your scientific uncertainty,” refer back to your original 3Q answers and add more detail if needed.

Step 3: Follow Up & Stay Organized

• Keep records of all CRA communications.
• Respond within the deadline given by CRA (usually 30 days).
• If you need more time, request an extension before the deadline.

6. Avoid Dishonesty: The Long-Term Risks of Manipulating Your Claim

🚫 Don’t inflate expenses or create fake documentation.
🚫 Don’t exaggerate technical challenges to make a routine project look like R&D.
🚫 Don’t copy-paste generic responses into the 3Qs—CRA reviewers will notice.

💡 Why Honesty Matters:

• A dishonest claim can result in penalties, tax audits, and a bad record with CRA.
• Confidence in your claim makes it easier to defend in a review.
• Filing accurate claims builds long-term credibility for future refunds.

💡 Lesson: SR&ED is already generous—there’s no need to risk compliance issues by manipulating claims.

7. Final Thoughts: The Best Way to Avoid a Review is Filing a Strong Claim

• If you follow these best practices, your SR&ED claim should be approved without issues.

• A well-documented claim has a higher chance of approval without review.

• Track employee time, keep technical logs, and ensure consistency across your claim.

• A CRA review is not a rejection—just an opportunity to provide more details.