Vancouver CPA | Thinking Ahead of Time with Employees
Vancouver CPA says there is often a lot that goes in to business in terms of humanities. For example, take psychology for example. Psychologically speaking, entrepreneurs tend to be considered to have been wired the right way because they hold the power of suggestion and can influence people. They are very used to the fact of tending to the proverbial selling ice to Eskimos thought process. What that means basically is that they are very good at problem solving and influencing. They can influence their employees, and they can certainly influence their clients and customers. They can stay on task with your mission, as they are looking for time and financial freedom and they are steadfast in getting that. As well, they have a vision as how they are going to get to their mission, i.e. the process. And then, they are going to talk about what happens with all the problems. They are going to be able to deal and adjust for the province.
So, says Vancouver CPA, the problems that may be involved with owning a small business, is dealing with a certain amount of contractors versus employees. You may have retained some contractors, however, to the Canada revenue agency it looks as though you have employees. You have to be very careful with this. You may be having to pay a lot of money in fines and taxes because the Canada revenue agency feel as though you have employees that are acting will contractors, and not paying into CPP, and IE.
If in fact you have not done this and have not had an employee pay into CPP any EI, then you have to pay the CPP and EI retroactively and it will be deducted from their checks. This can go back potentially years. They will potentially ask for both sides, the employees side and the employer side. If you think about it, this could be five, maybe six, or maybe $7000 or more per employee, plus penalties and interest, multiplied by the number of years. That could potentially be enough to empty your savings, and go into potentially your profits. For example, you could have completely lost her business because of the smoke and mirrors show that you are trying to play with the Canada revenue agency.
The single most important factor when considering contractors versus employees is the fact that you have to be able to mitigate and understand risk. It is an educated risk and may not be worth your time if you are just paying a couple of hundred dollars for certain employees versus contractors.
Pragmatism is a very good idea in this state and scenario, advises Vancouver CPA. Do you in fact have the contractor that maybe you are just paying a few hundred dollars a year to question mark that is what we call when we talk about pragmatism.
Consider what the is going on with the so-called contractor could they be potentially responsible for and missing work because of their training?
Vancouver CPA reminds people and warns people that there is the sex sensible well accomplished entrepreneur who, although they are used to being able to push their way into certain amount of situations and is able to persuade a lot of people, and whose people will be able to buy from them. They are going to gather details in writing, says the charter professional accountants. As well, they’re going to isolate a couple of the so-called contractors, says Vancouver CPA and asking the questions, so each not just what the entrepreneur or accountant says. They will eventually get to the actual contractors as well.
Then the CRA will see that these contractors are in fact employees. They are eventually going to send the owner very big bill. This big bill could be in the sum of thousands, tens of thousands, or maybe hundreds of thousands of dollars depending on the severity and the length with which this has gone on on paid.
There are a lot of considerations on specific questions that they are going to ask. This is in terms of the charter professional accountants and the CRA. They want to know what the specific risk of profit and loss is. If in fact you profit from a business it goes well and all is well. But you might have to pay money.
If in fact it doesn’t go well and you have lost your business than they might not necessarily come after you but it is still technically a bill owed.
You might, as a small business owner not even know the risk, to your small business. You might want to reduce that risk level but you don’t know how. You may not be very well received by the other people who have been contractors for a long time as you want to make some certain amount of changes from within your business. When they are due for a raise, i.e., an instrument incremental increase, then, you will be able to introduce some certain changes to your business, as they will have been kind of kindly satisfied with the fact that they have just made more money.
It is definitely well received as they will view it as a raise instead of a shift or instead of altering the rules or that you’re changing the mechanism.
The which can do is you can just tell them also if you want to make more money you’ll just have to go through the incorporation process. You may in fact be able to do it in conjunction with the raise that they are going to receive as sometimes you don’t necessarily want to make too much fuss about it with them.
Vancouver CPA says that they will need to definitely pay CPP and EI if they have missed any of the payments and if they are in fact contractors or employees. This is something that the CRA is very bullish on.