Vancouver CPA | Calling All People Wanting to Exercise Caution
Vancouver CPA will warn many small businesses that have a tendency to retrain contractors to be very careful about the optics of contractors and employees.
The number one most important factor when you consider the issue is the risk of profit and loss for the small business. There’s a lot of considerations on specific questions that the Canada revenue agency is in fact going to ask, including questions about insurance, other customers, etc., However what is there risk of profit and loss? If you profit from a business than it’s obviously going to go very well and has gone very well. However, if not you will lose money.
They look at the so-called contractors and ask if there is a risk that they are actually going to lose money. That is one of the most important risk factors, potentially the single most important risk factor. All those questions that they are going to ask lead back into that technical rationale… Is this person a legitimate business owner with a chance for profit and or a risk for loss?
Number two and the second biggest important factor, is the control, meaning what is going on with this contractor, legitimate or not? Are they responsible for their own training. Do they in fact train themselves? Can they hire replacements to do their jobs if they are insisting on that particular person doing that particular work, etc.? Their particularly a lot of? That need to be addressed in terms of the certain factors.
Other factors to consider about the employee versus the contractor is questions that will be given by certain auditors. They will ask, says Vancouver CPA does this person have in fact any other clients under his tutelage? The list of questions is as a matter of fact huge, probably in the neighbourhood of 40 to 50 questions in length.
You might know you have a business that is potentially at risk. And you’re going to want to reduce that risk level, but at the same time switching people from contractors to employees is something that is going to cost you a little bit of money. As well, it may not be very well received by the other people that you are fanning and moving around. These are the people that have potentially been working that way for years, potentially most of their lives. Now, according to them, you’re changing the rules. When they are due however for a raise, that would be a wonderful opportunity in which you can instigate your plan. You can at that time move them and change the classification from contractor to employee. It will be better well received if you’re contractors/employees view it as a raise rather than changing the mechanism.
Warn them as well, says Vancouver CPA, that it is just friendly advice to them that you have a way with which they can make more money. It is called incorporation. Allow them to let this sink in.
Contrary to popular belief, says Vancouver CPA the Canada revenue agency will be able to be better able to caution you in terms of a contractor versus and employee. You have to be careful as that can cost you a lot of money if in fact your contractors are seen as employees. The reason for this is because the Canada revenue agency is going to want to collect their taxes from anybody that they possibly can.
There is a certain sense of psychology in terms of thinking about successful entrepreneurs and why they are the way they are and so successful. It is the simple fact that they are just wired the right way because they can influence people. They influence their employment ploys, they stay on task with their mission as their mission will lead them to financial and time freedom. Their vision is to be as successful and this possible in the shortest amount of time. And they’re good getting people to buy from them. As a matter fact they think that if you make a very passionate wonderfully emotional argument and speech that you’re safe. This is simply not true. It could be a lot of the fact that it could be an ego problem. And it also could be the fact that the CRA is going to call them up when they possibly don’t think that could happen. They are in fact contractors, says Vancouver CPA.
The CRA is going to call them up eventually one day and asked for details. That is going to be at a very big surprise to the employer. It’s something that you don’t know that they are going to come into your office or call you on this issue. They are going to gather details in writing, or on a phone interview, or in fact on an in person on-site interview, often with the owner. They will be very much incognito they are going to isolate a couple of the so-called contractors and asked them the questions. So each not just what the entrepreneur or the accountant says. They will eventually go down the line and talk to almost everybody from within your business. Be very careful as a CA definitely wants to retain and get all of the money that they possibly can and that they feel is definitely owed to them.
Vancouver CPA says the Canada revenue agency doesn’t care about the passion that you have. They just have a job to be very judicious on who they accept as a contractor. They are going to isolate a couple of the so-called contractors as well and asked them potentially about 40 or 50 questions so each not just with the entire entrepreneur in accountant says.
Michael Gerber, the author of the email says “the fatal assumption is if you understand the technical work of a business, you understand a business that does that technical work.”