CFO services | Hiring Practices To Avoid
A huge problem that is completely avoidable says CFO services is when business owners have been crushed financially by retroactive payroll remittances including penalties as well as interest charges because there contractors have been deemed employees by CRA. In addition to this problem being completely avoidable it is also very easily fixed. There is no reason why any businesses should continue to operate their business with this risk hanging overhead. It has the potential to completely financially ruin their business. business owners have a hard enough time trying to run their business and stay cash flow positive, that there is no reason that they should continue to operate their business with this risk hanging over there head.
One of the reasons why business owners continue to perpetuate this error, is that they have been doing it for such a long time, and never have had a problem yet. But there is a big problem in thinking that since theyíve never been caught they never will be. The longer a business owner allows this to happen in their business, the the more itís going to cost their business in the long run when CRA finds out. Business owners often also believe that they will be able to convince CRA to make the decision the business owners want says CFO services. But this is very rarely the case.
If the business gets audited by the CRA, the process is going to be a lot differently than the business owner assumes it will go. The auditor will do their own investigation to determine if the contractors are actually employees, they will follow the business and asked to speak to various people, they will talk to not only the owner but the employees contractors they may even speak to the End of the business to figure out the answer to those questions. Once the auditor has come up with their conclusion, the business owner will be mailed the assessment, and be on the hook for paying the remittances penalties and interest charges. Many business owners assume that there will be an opportunity to appeal the decision, but thatís not the case.
So what can a business owner expect if they get assessed by the CRA? CFO services say that it is a hefty amount that they will have to pay. For every contractor that was deemed an employee, the business owner has to pay all of the remittances that were ever owed since the beginning of their employment, plus interest plus penalties. Of course this amount is much higher for businesses that have been in operation longer, or who have hired lots of employees. This has the potential to be financially crippling to business. Some businesses who have received this assessment have been unable to continue operating their business.
This is a completely avoidable situation, says CFO service. Business owners can completely eliminate this risk from the beginning by refusing to hire independent contractors who are not incorporated.
Only 11% of business owners seek help when they need it says into it, the makers of QuickBooks – this is a scary statistic says CFO services because businesses who donít seek professional help, or seek help too late can run into huge problems. Such as business owners who only seek out the advice of their accountant after they have been crushed financially by retroactive payroll remittances, penalties and interest because there contractors have been deemed employees by the CRA.
Business owners can completely eliminate this risk in their business from the beginning, by asking for professional help when they are hiring employees contractors for their business. CFO service says that if they understand what factors will being contractor to a contractor and employee to be an employee, business owners can completely avoid the air of having the contractors be deemed employees later on.
So what does a business owner need to take into consideration to figure out if there contractor is a contractor? CFO services says that if that contractor has actual risk, can determine if they are a contractor or not. Do they have the risk that they may lose money, do they buy or use their equipment, by their own supplies or materials, do they have to buy their own insurance? If they have risk to them, they will begin contractors. The other most important determining factor is how much control a business owner has over that contractor. Questions like can I have the clients, Knesset their own schedule, can they hire their own replacement? The more control the business owner has over the person, the more likely the person is employee.
By implementing some strategies into the hiring process, business owners can be sure that they donít have this problem in their business ever. A great will of them is hiring independent contractors, ensure that they are always incorporated. If the independent contractors always have their own corporations the business owner can ensure that they donít incur any of the risk. They just have to make sure that their employees that they hire have the proper payroll source instructions, and the business owner will never run into the problem of CRA audit forcing them to pay thousands of dollars.
Fortunately this advice does not come too late for businesses who have been making this mistake says CFO services. It is very easy mistake to fix, by asking contractors that they have working by them to incorporate. If the business owner waits until that contractor is due for a pay raise, they can present it as though contractor will get a pay raise if they incorporate. Another way that they can fix the problem is simply by switching contractors to employees by ensuring that heroes were subject started to get off their check. It really is that easy to fix this problem. Very quick and simple solution for a potentially business and problem. All businesses should ensure that they are not going to have this problem their business, at least take efforts to fix it.