Guide
SR&ED claim preparer rules: who is named and who is liable
Updated
The most useful fact about SR&ED consultants is one almost none of them lead with: the Act knows they exist, names them on the form, and attaches a shared penalty to getting that part wrong. Once you know that, several vague questions become specific ones.
The definition
Subsection 162(5.3) defines a claim preparer of an SR&ED form as a person or partnership who agrees to accept consideration to prepare, or assist in the preparation of, the form, but expressly not an employee who prepares or assists in preparing it in the course of performing their duties of employment.
Two consequences follow. Paid help is a claim preparer whatever the engagement is called, so an arrangement described as coaching or as a technical review is caught if it is assistance in preparing the form for consideration. And in-house preparation genuinely has no named preparer, which is the one structural advantage of doing it yourself.
They are on the form
Paragraph 37(11)(b) requires the prescribed form to contain claim preparer information, as defined in subsection 162(5.3). This is not a disclosure the claimant chooses to make.
So a reasonable and slightly unusual question at the pitch stage is simply: will you be named as claim preparer on the form, and what billing arrangement will be recorded? A firm that has thought about its own position answers immediately.
The shared penalty
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, to a penalty equal to $1,000.
The amount is small. The structure is what matters: liability is shared, and acquiescing in an omission is enough to attract it.
The preparer's defence, and yours
Subsection 162(5.2) gives the claim preparer a due diligence defence: they are not liable 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.
That defence is written for the preparer. A claimant relying on somebody else's process should be aware that the two positions are not identical, which is a reason to see how the preparer information is captured rather than to assume it is handled.