Canada. Income Tax Act sections 37, 162 and 248
Choosing an SR&ED consultant: the questions that have statutory answers
Most advice about picking an SR&ED consultant is about fees, and fees are the part with no public answer at all. The parts that do have answers are better questions anyway, and almost nobody asks them. Your preparer has to be named on the form, by law. They are jointly and severally liable with you for a penalty if the claim preparer information is wrong. And there is a filing deadline that, if missed, does not reduce the claim: it deems the expenditure not to be SR&ED at all. Here are the preparation routes compared on those things.
| Option | Claim preparer is defined in s.162(5.3); checked 15 August 2026 | ||||
|---|---|---|---|---|---|
| Fully in-house Companies with an engineering lead who will document the work as it happens, and a finance function that knows the deadline | Your own technical and finance staff prepare the technical narrative and the cost schedules and file the prescribed form with the return. | No. The definition of claim preparer at s.162(5.3) means a person or partnership who agrees to accept consideration to prepare, or assist in the preparation of, the form, and it expressly does not include an employee who prepares or assists in preparing the form in the course of performing their duties of employment. | Internal time only, which is real but invisible, and it lands on the same engineers whose availability is the constraint on doing the work in the first place. | You defend it yourself. The people who did the work are the people who explain it, which is the strongest possible position on the technical questions and often the weakest on the framing of them. | The deadline and the documentation. Section 37(11) requires the prescribed form on or before 12 months after the filing-due date, and s.37(12) provides that where it is not filed in accordance with that subsection the expenditure is deemed not to be an expenditure on SR&ED. There is no partial credit for a late claim. |
| Your regular accountant Modest, repeatable claims where the technical story is simple and continuity with the year-end matters more than specialism | The firm that already prepares the corporate return adds the SR&ED schedules, usually working from a technical narrative your engineers write. | Yes, where they accept consideration to prepare or assist in preparing the form. They are a claim preparer within s.162(5.3) and are named accordingly. | Usually fixed or hourly, folded into the year-end engagement. It rewards getting the return filed, which is aligned with the deadline and neutral about the size of the claim. | Competent on the financial questions, variable on the technical ones. The technical review is about whether the work meets the statutory definition, and that is not a question the year-end file answers. | Under-claiming, quietly. An accountant who is not comfortable arguing technological uncertainty will scope the claim to the part they can defend, and nobody in the room will ever know what was left out. |
| Specialist consultancy, contingency fee A first claim, or a company that cannot fund preparation before the refund arrives | A firm whose whole practice is SR&ED. Technical writers interview your engineers, build the narrative against the statutory definition, and prepare the cost schedules. | Yes, and this is the route where the billing arrangement is most worth checking, because claim preparer information is required on the form by s.37(11)(b) and a false statement or omission in it carries the s.162(5.1) penalty jointly with you. | A share of the refund, contingent on success. It removes the cash barrier entirely and it rewards claim size, which cuts both ways: it funds a genuine argument for work you would have left out, and it creates pressure toward the boundary of the definition. | Usually included, and usually good, because the firm's fee is already at risk. Read the engagement letter on what happens if the claim is reduced or denied after the fee has been paid. | The definition at s.248(1) excludes named categories outright, including market research or sales promotion, quality control or routine testing, style changes, routine data collection, and the commercial production of a new or improved material, device or product. A claim that drifts into those does not fail at the margin, it fails on the wording. |
| Specialist consultancy, fixed fee Established claimants filing every year who want the cost predictable and the incentive neutral | The same specialist work, priced as an engagement rather than as a share of the outcome. | Yes, on the same basis. They accept consideration to prepare or assist in preparing the form, so they are a claim preparer whatever the fee model is called. | Fixed or capped, agreed before the work. It rewards efficiency rather than claim size, which is the right incentive for a mature claimant and the wrong one for a company whose first claim needs someone to go looking. | Depends entirely on the engagement letter, and this is the single most important clause in it. A fixed fee that excludes review support turns a CRA query into a second engagement at the worst moment. | Scope creep in reverse. A fee agreed against last year's claim can quietly stop covering the year the company did something genuinely new, which is exactly the year the claim needed the most work. |
| Specialist plus SR&ED financing Companies that need the refund as working capital before the CRA processes it | A specialist prepares the claim and a separate lender advances against the expected refund, sometimes with the two arranged by the same introducer. | The preparer is, on the ordinary basis. The lender is not, unless it agrees to accept consideration to prepare or assist in preparing the form, which is a question of what it actually does rather than of what it is called. | Preparation fee plus a financing cost, and they are separate charges even when they arrive on one page. Ask for them separately in writing before signing either. | As for the underlying preparer. The financing does not add review support and can add pressure, because an advance already drawn has to be repaid whatever the CRA concludes. | The interaction. An aggressive claim is worth more to finance against and is more likely to be reduced, and the downside of that combination lands on the company rather than on either adviser. Where the same party arranges both, ask directly how each side is paid. |
How these were chosen, how they are ordered, and what the table cannot tell you
Five preparation routes rather than five named firms. There is no register of SR&ED consultants, no accreditation for them, and no regulator that endorses one, so a table of named firms would be a table of marketing claims. What the law does provide is a definition of a claim preparer, a requirement that they be identified on the form, and a penalty they share with you. Those are the things a claimant can actually check before signing, so those are what this compares.
Every statutory statement here is taken from the Income Tax Act on laws-lois.justice.gc.ca, read on 15 August 2026. Each row's source is the provision that governs the obligation that route has to discharge. Nothing is taken from a consultancy's own description of its service, because a firm's account of what it is responsible for is the thing a claimant is trying to verify.
Order runs from the least outside help to the most, which is roughly the order of cost. It is not a ranking: a well run in-house claim by an engineering team that documents as it goes beats an outsourced one assembled from memory eleven months later, and the reverse is true just as often.
No fee, rate or contingency percentage appears anywhere on this page. Nothing published by the Canada Revenue Agency or by any Canadian authority sets what SR&ED preparation costs or what a contingency share should be, and a range published without the engagement letters behind it would be a guess given the appearance of a benchmark. What the table gives instead is how each fee model changes the incentives, which is the part you can reason about without a number.
This page is not tax advice and it does not tell you whether your work qualifies. Eligibility turns on the statutory definition of scientific research and experimental development and on the facts of your project, and neither a table nor a consultant's confidence settles it.
- Fully in-house Income Tax Act s.37(11), filing requirement
- Your regular accountant Income Tax Act s.162(5.3), definition of claim preparer
- Specialist consultancy, contingency fee Income Tax Act s.248(1), definition of scientific research and experimental development
- Specialist consultancy, fixed fee Income Tax Act s.37(11), filing requirement and claim preparer information
- Specialist plus SR&ED financing Income Tax Act s.37(12), effect of failing to file the prescribed form
SR&ED Finder is an independent site operated by Ellul Solutions Ltd. It is not affiliated with, endorsed by or connected to the Canada Revenue Agency, the Department of Justice or any consultancy named or unnamed here, and it is not an accounting firm, a law firm or a tax adviser. Nothing here is tax advice and nothing here tells you whether your work qualifies for SR&ED, which depends on the statutory definition applied to your facts. Every statutory statement on this site is taken from the Income Tax Act as published on laws-lois.justice.gc.ca and read on the date shown at the top of the page. We publish no fee, rate or contingency percentage anywhere on this site, because no Canadian authority sets one and a range without engagement letters behind it launders a guess into a benchmark. We take no commission from any preparer and carry no paid placements.
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What Canadian law says about SR&ED claim preparers, 2026
Last updated
There is no register of SR&ED consultants and no accreditation for them, which is why choosing one feels like an unstructured decision. The Income Tax Act does say several specific things about preparers, and each of them is a question you can put to a firm before you sign.
Every row is taken from the text of the Income Tax Act on laws-lois.justice.gc.ca, read on 15 August 2026, and quoted rather than paraphrased where the wording carries the meaning. Sections used: 37(11) for the filing requirement and the requirement that the form contain claim preparer information; 37(11.1) and 37(12) for the consequences of failing to file it; 162(5.1) for the penalty; 162(5.2) for the due diligence defence available to the preparer; 162(5.3) for the definitions of claim preparer and the employee carve-out; and 248(1) for the statutory definition of scientific research and experimental development including its exclusions. No fee, rate, contingency percentage or approval statistic appears anywhere in this table. Nothing published by any Canadian authority sets what SR&ED preparation costs, and a figure without engagement letters behind it would launder a guess into a benchmark. Credit rates are deliberately absent too: they belong to the claim rather than to the choice of preparer, and this page is about the preparer.
| What the law says | The provision | What it means when choosing a preparer |
|---|---|---|
| A prescribed form must be filed on or before the day that is 12 months after the taxpayer's filing-due date for the taxation year | s.37(11) | The deadline is the one thing no adviser can fix afterwards. Ask who owns it in the engagement letter, by name |
| That form must contain prescribed information in respect of the expenditure, and claim preparer information as defined in subsection 162(5.3) | s.37(11)(b) | Your preparer is identified on the form by statute. A firm that is vague about being named is telling you something |
| If the prescribed information in respect of an expenditure is not contained in the form, no amount in respect of the expenditure may be deducted | s.37(11.1) | Incomplete is treated like absent. Completeness of the schedules is not an administrative detail |
| Where a taxpayer has not filed a prescribed form in accordance with s.37(11), the expenditure is deemed not to be an expenditure on or in respect of scientific research and experimental development | s.37(12) | A late claim is not reduced, it is deemed out of the regime. This is the harshest provision in the area and the least discussed |
| Every person or partnership who makes, or participates in, assents to or acquiesces in the making of, a false statement or omission in respect of claim preparer information required to be included in an SR&ED form is jointly and severally, or solidarily, liable, together with any claim preparer of the form, to a penalty equal to $1,000 | s.162(5.1) | You and your preparer share this one. It is small in money and useful as a question: ask how they ensure the preparer information is right |
| A claim preparer is not liable for that penalty if they exercised the degree of care, diligence and skill to prevent the false statement or omission that a reasonably prudent person would have exercised in comparable circumstances | s.162(5.2) | The preparer has a due diligence defence. The claimant's position is not identical, which is worth knowing before relying on somebody else's process |
| Claim preparer means a person or partnership who agrees to accept consideration to prepare, or assist in the preparation of, the form, but does not include an employee who prepares or assists in preparing it in the course of performing their duties of employment | s.162(5.3) | Paid help is a claim preparer whatever it is called. Your own staff are not, which is the one real advantage of preparing in-house |
| SR&ED means systematic investigation or search carried out in a field of science or technology by means of experiment or analysis, being basic research, applied research or experimental development | s.248(1) | The test is systematic investigation, not novelty or commercial success. A consultant who talks only about innovation is not describing the statute |
| The definition does not include work with respect to market research or sales promotion, quality control or routine testing, research in the social sciences or humanities, prospecting or drilling, the commercial production of a new or improved material, device or product, style changes, or routine data collection | s.248(1) | These exclusions are absolute rather than matters of degree. Ask a prospective preparer how they keep a claim clear of them |
- The prescribed SR&ED form must be filed on or before the day that is 12 months after the taxpayer's filing-due date for the taxation year.
- Where the prescribed form is not filed in accordance with section 37(11), the expenditure is deemed not to be an expenditure on or in respect of scientific research and experimental development.
- The SR&ED form must contain claim preparer information, so a paid preparer is identified to the Canada Revenue Agency by statute rather than by choice.
- A false statement or omission in claim preparer information carries a $1,000 penalty owed jointly and severally by the claimant and the claim preparer.
- A claim preparer has a due diligence defence to that penalty where they exercised the care, diligence and skill a reasonably prudent person would have exercised in comparable circumstances.
- An employee preparing the form in the course of their employment duties is expressly not a claim preparer, so an in-house claim has no named preparer.
- The statutory test is systematic investigation or search in a field of science or technology by means of experiment or analysis, and it expressly excludes market research, quality control and routine testing, style changes and routine data collection.
Cite this page
“What Canadian law says about SR&ED claim preparers, 2026”, SR&ED Finder, https://sredfinder.com/ (updated 2026-08-15). Every row is taken from the text of the Income Tax Act on laws-lois.justice.gc.ca, read on 15 August 2026, and quoted rather than paraphrased where the wording carries the meaning. Sections used: 37(11) for the filing requirement and the requirement that the form contain claim preparer information; 37(11.1) and 37(12) for the consequences of failing to file it; 162(5.1) for the penalty; 162(5.2) for the due diligence defence available to the preparer; 162(5.3) for the definitions of claim preparer and the employee carve-out; and 248(1) for the statutory definition of scientific research and experimental development including its exclusions. No fee, rate, contingency percentage or approval statistic appears anywhere in this table. Nothing published by any Canadian authority sets what SR&ED preparation costs, and a figure without engagement letters behind it would launder a guess into a benchmark. Credit rates are deliberately absent too: they belong to the claim rather than to the choice of preparer, and this page is about the preparer.
Go deeper
Each one cites where its numbers come from.
The questions we get
Do I need an SR&ED consultant?
No, and the Income Tax Act is explicit that in-house preparation is a real option: subsection 162(5.3) defines a claim preparer as a person or partnership who agrees to accept consideration to prepare or assist in preparing the form, and expressly excludes an employee doing so in the course of their employment duties. So a claim your own staff prepare has no named preparer at all. Whether it is the right choice depends on whether your engineers document as they go and whether somebody owns the filing deadline by name.
Is my SR&ED consultant named on the claim?
Yes, where they are paid. Paragraph 37(11)(b) requires the prescribed form to contain claim preparer information as defined in subsection 162(5.3), so a paid preparer is identified to the Canada Revenue Agency by statute rather than by choice. It is a reasonable question to ask at the pitch: will you be named as claim preparer, and what billing arrangement will be recorded on the form?
What is the penalty if the claim preparer information is wrong?
$1,000, owed jointly. Subsection 162(5.1) makes every person or partnership who makes, participates in, assents to or acquiesces in the making of a false statement or omission in respect of claim preparer information jointly and severally, or solidarily, liable together with any claim preparer of the form. Subsection 162(5.2) gives the preparer a due diligence defence where they exercised the care, diligence and skill a reasonably prudent person would have exercised in comparable circumstances. That defence is written for the preparer, and the claimant's position is not identical.
What is the SR&ED filing deadline?
The prescribed form must be filed on or before the day that is 12 months after the taxpayer's filing-due date for the taxation year, under subsection 37(11). Missing it is worse than it sounds: subsection 37(12) provides that where the form has not been filed in accordance with 37(11), the expenditure is deemed not to be an expenditure on or in respect of scientific research and experimental development. It is not a reduced claim, it is a change to the character of the expenditure, and there is no discretion to be exercised.
What actually qualifies as SR&ED?
Subsection 248(1) defines it as systematic investigation or search carried out in a field of science or technology by means of experiment or analysis, in one of three limbs: basic research, applied research, or experimental development for the purpose of achieving technological advancement in creating new or improving existing materials, devices, products or processes, including incremental improvements. Support work in engineering, design, operations research, mathematical analysis, computer programming, data collection, testing or psychological research is included where commensurate with the needs of, and directly in support of, eligible work undertaken in Canada.
What is excluded from SR&ED?
The statutory definition does not include work with respect to market research or sales promotion, quality control or routine testing of materials, devices, products or processes, research in the social sciences or the humanities, prospecting, exploring or drilling for or producing minerals, petroleum or natural gas, the commercial production of a new or improved material, device or product or the commercial use of a new or improved process, style changes, or routine data collection. These are absolute exclusions rather than factors to weigh, and the commercial production limb is the one that most often trims a software or manufacturing claim.
What should an SR&ED consultant cost?
We publish no figure, and no Canadian authority publishes one either. Fees are set by firms and vary with claim complexity, whether a technical narrative already exists and how much of the work is discovery rather than assembly, so a range here would be a guess given the appearance of a benchmark. What is worth comparing instead is what each fee model rewards, and one clause that both models often leave out: whether support at a CRA review is included, and by whom.
Sources
- Income Tax Act s.37, scientific research and experimental development (laws-lois.justice.gc.ca)
- Income Tax Act s.162, failure to provide claim preparer information (laws-lois.justice.gc.ca)
- Income Tax Act s.248(1), definition of scientific research and experimental development
- Income Tax Act, consolidated (laws-lois.justice.gc.ca)
Ask the questions that have statutory answers
Five preparation routes on who is named, who is liable, what each fee model rewards and where each one goes wrong.