Vancouver CPA | Excited to Work for Employees and Contractors
Vancouver CPA often warns against the big conglomerate companies. These the ones that will bring someone on as an employee and, although the Canada revenue agency love this as they are going to get their share of tax and it’s often easy.
However then, if you bring on an incorporated contractor, the Canada revenue agency doesn’t care about that necessarily either, as that is legal and well taken care of with a charter professional accountant and a lawyer. They will be able to accept that professional relationship.
However, all the risk it happens when you hire a contractor that is unincorporated. What happens is you are than taking on all of the risk in case there is an injury, I health risk, or something more nefarious like theft, etc.
Often times what happens is the big rule of thumb is don’t hire unincorporated companies!!! This is just because nobody is in fact covered. There could be a lot of lawsuits and legal matters that if something happens when somebody is not incorporated and retained for work.
Vancouver CPA says the singer most important factor is the fact that there are going to be businesses that are going to be gaining revenue and losing revenue. You have to be able to chart that. What this means is this is the risk of profit and loss. So how much risk you going to take before you have lost a lot of money?
Vancouver CPA says what’s going on with this so-called contractor? This could be not very good for your business as well. If the contractor is in fact unincorporated then again there is nothing that can legally help you if there is something going on that is poor.
However, they there are the rich, seasoned veteran entrepreneurs who feel as though that they will be able to get away with a lot of things with the Canada revenue agency because they feel as though they have the silver tongue, and the experience to be able to get away with certain matters. Unfortunate, this is not at all true in that the Canada revenue agency has seen everything, all types of scenarios and stunts. If by chance you feel that your charm is going to get you out of paying more tax, or assuming that you had misled the Canada revenue agency, and you have accrued a lot of fines, you will definitely have to be paying these.
Further to that, they can definitely collect tax. They can say that they are going to have to pay the withholding tax. Although the withholding tax obviously they will forgo. What they will worry about for the most part is CPP and EI. Those are considered the big-ticket tax draws. And that’s what the Canada revenue agency will be collecting on. So if there is a lot of back tax, you will be paying tens of thousands maybe hundreds of thousands of dollars for years to come.
Vancouver CPA says that you have to be very cautious when dealing with different contractors as there are different types. They are the types contractors that are insured and incorporated. Those the ones that are ethically and legally in the right to hold a certain sense of responsibility.
As well, there is the legal employees. Those the ones that the company itself will hire and be under that specific companies umbrella.
However, be leery and weary of the unincorporated contractor. That means that you, as the employer, or as the business, will automatically assume all of the responsibility if something goes wrong on his behalf, such as a theft, injury, etc.
You might as well know that you have risk within your company if and you’re going to want to reduce that particular risk level. Vancouver CPA says at the same time switching people from contractors to employers can be a sticky situation in that a lot of contractors have a doing it for very long time and they are very comfortable within their job and within their role. They might feel as though you have stormed in and switched the rules of the game on them.
Make sure that you are able to frame it in such a way where you will be giving them a “raise” so to speak so that the will be able to buffer the sense of foreboding from contractor to employee. Make sure that you intentionally talk to them and tell them also that if you want to make more money than they already are an excellent option would be to in fact incorporate as you are a contractor.
Auditors in fact, says Vancouver CPA, will ask if the person in question has any other clients along with them? The list of questions is really very big if you do in fact get interrogated and there is a sense of scepticism over you whether you are a employee or not with a company. The questions will talk about insurance, any other customers, etc. The costs, and the responsibilities as well.
Did you just tell him how much they’re making? That is not a good idea if you are a contractor. All the questions you’re going to go back to what’s the risk profit and loss to that particular contractor.
Ideally what is going on with the clients should be a very pragmatic decision. Do you have in fact one contractor that maybe you are giving money to that is maybe just a couple hundred dollars a year? Maybe there are some potential risks that go along with this, hopefully not. Be pragmatic and the prepared on taking care of that risk. The CRA auditors will usually even ignore as they have a buffer zone, so they will ignore a couple of hundred dollars in terms of their audit procedure. But if you’ve had several thousands of dollars and 5060 or $100,000 in payments to unincorporated contractors you may be in a lot of trouble.