Vancouver CPA | Voting on Behalf of Contractor versus Employee
Business owners, says Vancouver CPA, often get confused with the difference between unincorporated unincorporated contractors, or the difference between them and employees.
What happens, often is when you consider the fact that we are dealing with the Canada revenue agency, who is a major faction obviously of the Canadian government, that they are ruthless in getting what is owed to them.
In terms of small businesses, you can make sure that you are safe and that you have incorporated your business, as well as the businesses of people that you have retained as contractors. For example, the Canada revenue agency will not worry about employees of your company. As well, they will not worry about unincorporated contractors that work from within your company. For the real problem the real risks occur is in unincorporated companies, businesses, and people. If that is the case, and you have retaining unincorporated companies business, the risk falls on you.
Vancouver CPA says that business owners will come to a charter professional accountant often when it is too late and that charter professional accountant can do little for them. What they have done is they have accrued a lot of tax, and fines and penalties, because of that mistake. As little as the charter professional accountant can do they will try as best as they can, however most of the time their hands are tied in what they can do. Although, that particular charter professional accountant might have a good relationship with the Canada revenue agency, businesses business, and the Canada revenue agency is still bullish on wanting to get what is owed to them.
As well, consider, says Vancouver CPA, the psychology of the matter of entrepreneurs, the employees, and the suppliers. Entrepreneurs often are wired the way with which they can certainly influence people to see it in from their point of view and see it that way. They stay on task with their goals, both immediately, and long term. They know their mission is that of often time and financial freedom, for most them and their family. As well, they have a very clear and straight vision of how they’re going to get to their outcome. And they know how to mitigate, and deal with certain problems to come to a very positive outcome. They think that if you make a extremely passionate, and dramatic argument that the Canada revenue agency will in fact about to their thoughts and arguments. That however is absolutely untrue, in the Canada revenue agency sold goal is to be the judiciary committee in terms of all financial elements for the government.
Try as they might, the charter professional accountant will not be able to do anything in terms of getting those penalties or fines lifted for the small business owner. It will however be on to the small business owner to pay those fines. Those fines, depending on what happens can be in the tens or hundreds of thousands of dollars.
Vancouver CPA says that there is something different about employers entrepreneurs as they are very better able to influence people to work with them and to work within their rules and their requirements. This, can definitely be to the advantage of small businesses. Oftentimes what happens is small business owners have a definite and very clue clear view and process of how the to get their main goal, of financial and time freedom. They work within a schedule, and they do very seldomly deviate.
In terms of retaining a contractor or making it look as though they are an employee, this can be very devastating and detrimental for a small business. Not only is it not necessarily illegal, but it can be very financially devastating for your company. If in fact your small business is found in breach of retaining a contractor as an employee, you stand to lose thousands, tens of thousands, or hundreds of thousands of dollars,.
Oftentimes the question will be what is going on with this contractor? They potentially will be responsible for their own training. The question becomes then if they are not responsible for their own training, do they train or find a trainer themselves? Further, what happens if they need to hire a replacement, because they are gone that day that week or that month? Is that small business owner absolutely going to insist on that particular and specific person to be working for them or can they bring in their own replacement?
There might be legitimate and specific and very cognitive risk with in your small business. At the same time, however you definitely want to, for obvious reasons, switch contractors to employees, says Vancouver CPA. This may be fraught with a couple of potential dilemmas. First of all, this will be at your specific cost.
As well, you may get a lot of pushback on switching contractors to employees. A lot of these contractors have been working as such for most, if not all of their working lives, and don’t know any other. Consider the fact that humans quite frankly just don’t like change. It will not potentially be very well received, and they potentially think that you are changing the rules on them.
Consider the fact, says Vancouver CPA, that you might want to make the change as you are giving them an incremental increase, or a raise. That might be a good time to move them and change their classification from contractor to employee. It will be better received, as they’ll view it as they raise rather than your changing the mechanism with which you are going to pay them.
As well, advise them that it might be a very good idea for them to change from contractor to employee, as they’re going to quite frankly make more money. If you can do it in conjunction with a raise, sometimes there may not be less conflict from within your business when this in fact happens.