CFO services | Payroll Source Deductions
Business owners who only seek professional help after they have a payroll audit done by CRA, could have avoided huge problems in their business by seeking help in their business sooner says CFO services. To it, the makers of QuickBooks a only 11% of all businesses seek help when they need it. This is a troubling statistic especially because so many huge errors with far-reaching implications can be avoided very simply and easily.
An example of a problem that can be easily avoided is when business owners are hiring in many contractors in their business. Says CFO service They hire a contractor who is not incorporated, business owners take on the risk that CRA may being the contractors as employees. They can easily and effectively eliminate that risk completely by ensuring that any of the independent contractors that they hire have their own corporations set up, all of the risk falls away from the business. Big successful companies avoid getting assessed by CRA for this reason by ensuring that they follow this very simple rule.
If business owners have already made this error, they can easily fix it says CFO services. All they have to do is switch contractors to employees by taking source deduction off their paycheck. If they would like to keep those independent contractors as contractors, all they have to do is request that they incorporate. With how easy it is to avoid and eliminate those problems, itís bewildering that any businesses actually continue to have this problem.
Many business owners fail to realize how serious this problem is, and believes that they will be able to talk CRA out of assessing them says CFO services. Sexy very rarely the case because CRA is sole job is to judge entrepreneurs and be extremely judicious at who is considered a contractor because thatís how CRA collects their taxes. Itís a very fact driven process, the auditor will gather their information, talk to the owner, employee and contractors to determine who should be deemed a contractor. They will use several questions in order to make that determination. Once theyíve come to the conclusion, they never have to see that business owner can simply mail them their assessment.
The auditor will ask a series of over 50 questions however, The two most important questions that auditors will ask contractors to determine if they actually are contractors or if they should be considered employees is if that contractor has any risks in the business, and how much control it business owner has over that contractor. The more risk a contractor has, the higher likelihood that be considered contractor, the more control business owner has over the contractor, the higher likelihood CRA will determine that they are an employee. Other questions the auditors will ask, are in the contract to have other clients, whose entrance to the use, what bills are they responsible for, can they hire their own replacement, who is responsible for training, whose setting their schedules, who set the price, they never have to buy or use their own equipment, supplies, or materials.
Business owners only seek help after they have been crushed or are about crushed financially by his plus penalties plus interest because there contractors have been deemed employees by CRA should know that can help have time to help them very easily avoid this issue altogether in their business says CFO services.
Who the frustrating part about this problem is completely and entirely avoidable it is says CFO service however business owners who have started making this error, and to continue making it for a long period of time justify it because since theyíve never had an audit, they wonít get an audit. The reason why this thinking is so dangerous is because the longer they make the mistake, the more the mistake is going to cost them when they do get found out. Any reason any business owner Would willingly take on such a massive risk in their business for no reason is a complete mystery. When this issue can be avoided in the first place, and fixed in the second.
In order to avoid this problem in the first place says CFO services, all business owners need to do when they are hiring independent contractors is, that they must only hire independent contractors who have their own corporations set up. Thatís the only key they have to remember in order to avoid this problem in the first place. All employees should have source deductions taken of their paychecks, and all independent contractors need to have their own corporations. The following those two simple rules, business owners completely and immediately eliminate that problem forever.
however, if business owners have already made this error in their business, Says CFO services the fix is equally as easy. All business owners have to do is switch those contractors that should be considered employees by ensuring that payroll deductions come on their paycheck. If this is owner would like to keep that independent contractor as a contractor to the business and not an employee, all they have to do is request the contractor to become incorporated themselves. Both the employee and contractor may not appreciate either having to pay extra taxes, or having to incur the cost of incorporation, but if the business owner can make it as part of their ways, employees and contractors will be more than happy to oblige.
The amount that the employer is at risk is for every contractor that is deemed an employee by CRA, the business owner will have to pay all the most source deductions, plus interest plus penalties for each of the employees the entire length of time they were employed by that company.
For these reasons, business owners who are this error should take immediate steps to avoid it and businesses that have not yet made mistakes in hiring contractors, can continue confidently that they will not put their business at risk. especially since the for such an air is so huge.