Vancouver CPA | Help Us as We Exercise Caution
Vancouver CPA says caution, common sense, logic, and pragmatism comes into play when thinking about working with contractors versus employees.
Often times will happen is becoming will bring someone on as an employee. In terms of the Canada revenue agency, they love that as that is just one more person that is going to be paying their fair share of tax, and it’s quite cut and dry. Then if you bring on an incorporated contractor, the CRA also doesn’t matter one way or the other about this transaction and this working relationship.
However, all the risk is when you hire an unincorporated contractor. There is a lot of risk involved with this transaction and this relationship. Big companies won’t even discuss the fact that they want to hire an incorporated company or an unincorporated contractor. It is just quite frankly common knowledge that it is bad business.
So what happens, asks Vancouver CPA, if in fact the CRA has deemed somebody an employee when the company has been considering them as at contractor, they will have to pay a very very big bill, sometimes often tens of thousands or even hundreds of thousands of dollars. They don’t care about the big dramatic, emotional speech that you have given them. They will go to their office, they will consider the case, and then they will be in touch with you and you will have to pay a lot of money. Often so much money where it is prohibitive, or even detrimental and disastrous to your business.
The single most important factor is the fact that you have to take into consideration the risks of profit and loss. What does this mean for your business? It means exactly that it means are you going to be able to succeed in your business or are you going to lose your business and fail. You have to make very prudent decisions so that you don’t lose your livelihood and your life savings.
Oftentimes the question goes on that what is going on with the so-called contractor? Are they responsible for their own training? Another question would be from the Canada revenue agency is they want to know if that person is training themselves. Maybe they can hire replacement to do their job or they need to know our you as the employer insisting on that particular person doing that particular work?
There are going to be some questions from the Canada revenue agency in regards to what is going on with the so-called contractor, says Vancouver CPA. Potentially they will be responsible for their own training or not? Do they train themselves? Can a revenue agency will also wonder if when they are needed to hire replacement to do their job is the employer insisting on that particular person doing that particular work?
Be cautious with auditors as well as they will ask any questions such as the be curious about that particular person and the propensity of them getting other clients, etc.
Vancouver CPA says that there can be very challenging times ahead indeed if the business owners will come and say they been in business for potentially year potentially five years potentially 10 years, or longer. And have had no interactions or run-ins in a negative way with the Canada revenue agency.
What this could potentially mean is that, says Vancouver CPA, they just haven’t run into any of the problems as of yet, but they are definitely coming if you keep on dealing that way. It will work in fact and till it doesn’t, and at least it will be than a very challenging time.
It is in fact, simple like the same thing as may be a smoker. This analogy can be used as the smoker may not have any derogatory health issues yet but it is in fact coming if they are still going to continue with the habit.
It is just a matter of time before they are caught up with and that Vancouver CPA says their attitudes and their habits definitely need to be changed.
Consider the psychology of entrepreneurs and small business leaders and owners. They potentially just have the attitude and the mindset that they are good at influencing people to believe in the product, the service. They influence their employers, and they in fact will potentially stay on the job at hand. They often focus primarily on their mission, so that it comes to a positive outcome. They will then focus on their vision, which should be, time and financial security and freedom. As well, they will concentrate on how to overcome all of their problems from within the business and personally. They are good at getting people to buy from them and to believe in their product and their vision right along with them.
They think as well that if you give a very passionate very logical very heartfelt argument or speech, then they will be safe as far as the grip of the Canada revenue agency. The problem is that anybody can make a passionate, logical argument, often on both sides of the issue.
Considering the fact that these successful entrepreneurs have been online and they brought a couple of thoughts about if you should stay at contractor versus if you should stay an employee, or if you should retain a contractor versus an employee, you will be safe only and often when you make a great argument.
However, the ruling process, the Canada revenue agency brain trust, it’s probably not going to go down the way that they think it will.
They think that if they come into the office and make a wonderful argument that somehow the CRA is going to have to buy into that argument. If not, there going to have ample opportunity to close and close again. That’s simply not how the system or the plan is going to work.