Vancouver CPA | Knowing That You Want to Work for Employees
Vancouver CPA hopes upon hope that nothing will befall anybody if they get caught by the Canada revenue agency about having contractors as potential employees or vice versa.
A lot of people will want to be on a one-on-one interview, often with the owner. They are going to isolate a couple of the so-called contractors and ask them the questions so as to wonder if they are in fact employees. Each will not know that at the very beginning how they got caught because they were going in Camino into the business. They will get to the actual contractors eventually as well.
Then the CRA will see that these contractors are in fact employees and that is when it can potentially get very expensive for the employer.
In terms of it getting very expensive we can talk about fines of up to tens of thousands or even hundreds of thousands of dollars.
Vancouver CPA says that there are a lot of considerations on specific questions that they are particularly going to ask. A lot of this has to do with insurance, other customers that they may have retained, etc.
Business owners will come to CRA and say that they’ve been in business for as long as possible potentially even a decade or more. And they state that they haven’t had yet a problem with the Canada revenue agency. That may be so much it may be coming to a point where their time is finally coming to an end and coming out. It will in fact catch up to you and eventually the contractor, the employer and the employee are going to have to pay a lot of money.
Psychologically, entrepreneurs are considered very influential, says Vancouver CPA. If you make a great argument and if you shed some tears, the Canada revenue agency is not even going to bat an eyelash. As they have seen this time and again. They are not in fact going to buy into that argument and if not they’re going to have the opportunity to close but that’s not how it often is going to work. They think that if they make a very passionate case that they will be able to get a free pass if they have done something ethically wrong and potentially legally wrong as well.
Business owners who have gone through this and now are at the brink of bankruptcy, or are hundreds of thousand dollars in debt will now come to see their CPA, often at the 11th hour. Often times what happens is they have already lost their business and now they are looking to the charter professional accountant for advice about retroactive payroll remittance, penalties and interests, because her contractors are going to be deemed employees by the CPA, and they don’t know what to do. This can be a very challenging time as they are often now looking to their charter professional accountant to get there business back.
Vancouver CPA that there are not often times when you’re going to know that the Canada revenue agency will be looking into the potential misappropriation of contractors versus employees. They will be coming into your business obviously not knowing that it is the Canada revenue agency in order to investigate what potentially is happening.
If that is in fact the case, says Vancouver CPA, there could be a lot of money that will be owed to the government on your behalf. All of a sudden you will be getting a letter from the mail stating that you old this many thousands of this many hundreds of thousands of dollars.
Consider the fact that control is a very important factor, however, risk profit and loss must be the number one factor. You have to consider risk in every day dealings if you are in fact an entrepreneur. Particularly, if you are a small business owner, you want to be able to hire people knowing that you are going to be safe and not going to have any repercussions.
What this basically means is you can, hire outright an employee as part of your business. As well, you are very safe and happy to be hiring an incorporated contractor. However, be aware of hiring an unincorporated contractor this comes with many pitfalls, and negative consequences.
The age old comment, reminds Vancouver CPA, is you never hire unincorporated companies. That doesn’t matter if you’re big conglomerates or a small mom-and-pop shop. That just comes along with too many responsibilities, and too many negative consequences.
Michael Gerber the author of the email, says “the fatal assumption is, if you understand the technological work of a business, you understand a business that does that technical work.”
50% of all businesses are out of business in five years, says Intuit, the maker of QuickBooks. As well, the other statistic is 29% of these failed businesses will cite that they ran out of money.
Business owners often come to charter professional accountants only after they have been crushed or about to be crushed financially by retroactive payroll remittances penalties and interest because the contractors have been deemed employees by the Canada revenue agency.
As mentioned, this can be devastating and couldn’t be the bullet to the heart of many companies if the Canada revenue agency puts fines against you for this matter. The CRA auditors will usually ignore $500 then usually have a $500 threshold in their audit procedure, however anything over them that they will certainly be looking after and be making it part of the process.
One of the frightening thoughts is that if in fact a contractor is deemed an employee, you will have to pay the CPP and the EI in that would’ve been deducted from the checks retroactive back from potentially years ago. They will ask for both sides, the employees sides and the employer’s sides. That could potentially be, according to rough math, five, six, or $7000 per employee plus penalties and interest multiplied by the number of years.