Vancouver CPA | It’s Incredible What Incorporation Can Do
Vancouver CPA engages many small business owners and potentially many successful, well accomplish entrepreneurs who are used to being able to persuade people, including their subordinates, their coworkers, their employees, and yes sometimes there clients and customers. However, there comes a problem when these entrepreneurs attempt to try and persuade the Canada revenue agency. The Canada revenue agency views them as does the same ruling over and over again. The argument that these people who are working for me are in fact contractors and not employees, the CRA is going to call them up and ask them for details. Make sure that if you are in arrears of this and you in fact our employing contractors instead of employees, they will be calling you on this issue. They’re going to gather details in writing, on a phone interview, or an on-site interview. All the while, as well, you will not know that they are working for the Canada revenue agency, as they will be incognito. They are going to ask and isolate a couple of the so-called contractors and ask them questions so that they potentially get to the bottom of what is going on. They will ask so that each not just what the entrepreneur or accountant says, they will eventually in fact talk to employees as well.
Vancouver CPA says then what happens is they will be leaving, and they will be deliberating over the case, and deciding if in fact the company and the player is in arrears of retaining contractors as employees. If in fact that company and that business owner is found guilty, the Canada revenue agency will come back with a very big bill for the small business owner to pay. These big bills, can be in the neighbourhood of tens or hundreds of thousands of dollars.
They also don’t necessarily care about this passionate plea or speech that you are about to make in order to attempt to get out of that situation, says Vancouver CPA. As the Canada revenue agency, it is their soul job to be very judicious on what they accept as contractors. Bear in mind they have potentially seen it all in terms of pleas, guilty associations, and dramatic speeches. It is very unlikely that you will be able to convince the Canada revenue agency to forget the matter. Expect that if you are guilty of this procedure to need to pay that bill.
From within your business, you might know in fact that you do have a risk. You’re going want to reduce that risk level, but at the same time you want to be switching people from contractors to employees. Sometimes this can be met with extra costs as well as apprehensive and potentially belligerence contractors. Consider the fact that these contractors have been working as such for years and don’t know any other way. Now all of a sudden you are changing the rules on them. This is potentially met with a lot of scepticism.
Vancouver CPA loves the fact that oftentimes there are far more honest business people and small business owners then there are unscrupulous ones. Oftentimes if you work within the rules, there will be no cause for concern, no problems, no extra charges, and the Canada revenue agency should not be breathing down your neck.
However, if you are found that you have contractors as employees or vice versa, expect the fact that the Canada revenue agency will in fact be suspicious of this act. They will come in to your business, incognito so that nobody knows who they are or who they are associated with, and they will be asking a bunch of questions. After all the questions of the employees, the business owner, the contractors, etc. are completed, that Canada revenue agency employee will go back and deliberate on the case. Then they will consider whether you are guilty or innocent. If you are guilty, expect that they will come back with a very big bill for you to pay. Oftentimes this bill will come in the form of tens or hundreds of thousands of dollars. Likely, you will not have that as revenue in your bank account to pay before you lose your business altogether.
As well, says Vancouver CPA you have to pay this Canada pension plan and the employee insurance that you would’ve deducted from their checks retroactive back from potentially years if you have contractors that are deemed employees. They will ask for both sides of the position, the employees and the employer. That could potentially be 5000, or 6000, or potentially may be $7000 per employee, plus penalties and interest, multiplied by the number of years. Again, that can amount to tens or hundreds of thousands of dollars. Think about this way. You have just spent potentially your life savings on getting your small business and getting it up and running. Now, through a very egregious error on your part as the small business owner, you will again have to pay tens or hundreds of thousands of dollars to the Canada revenue agency.
That can amount to potentially you having to dissolve your business altogether. They will consider the fact that they don’t know what is going on with that so-called contractor. The questions they may ask is are they responsible for their own training? Maybe they train themselves? Can they hire replacements to do their job or are they insisting on that particular person doing that particular work, asks Vancouver CPA. The list of questions can potentially be endless, and very time-consuming and very stressful for the business owner, the so-called employee, or contractor.
Consider to major factors in this process and this dilemma. The number one consideration that a lot of small business owners will have to make is the risk of loss and profit. Is it really worth it to go through this process if you are about to lose your business?