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On April 2, 2020, the Finance Minister announced various updates on the measures the Canadian government is taking to support individuals and businesses. These new measures, delivered as part of the Government of Canada’s COVID-19 Economic Response Plan, will now provide up to $82 billion in direct support to Canadians and Canadian businesses.

Changes to income tax filing and payment deadlines:

• The CRA has provided a dedicated web page that summarizes the new deadlines for all tax returns and tax payments: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/covid-19-filing-payment-dates.html

UPDATES FOR BUSINESSES

The Canadian Emergency Wage Subsidy (CEWS) 

The government announced a wage subsidy of 75% for qualifying businesses, for up to 3 months, retroactive to March 15, 2020.

Eligible employers would include individuals, taxable corporations, and partnerships consisting of eligible employers as well as non‑profit organizations and registered charities.

The current update and details given:

• This subsidy will be available to eligible employers that see a drop of at least 30 percent of their revenue, year over year (i.e. March 2020 versus March 2019).
• Employers will need to attest to the decline in revenue and re-apply monthly.
• The subsidy will provide support of up to 75% of an employee’s wages for a 3 month period retroactive to March 15, 2020, to a maximum of $847/week (75% of the first $58,700 of an employee’s salary).
• The subsidy is limited to the lower of the above and the pre-crisis remuneration for the employees, including non arms-length employees (i.e. owners and shareholders)
• More information related to the CEWS can be found on the Government of Canada’s website here.
• The Canada Revenue Agency (CRA) will coordinate the CEWS through an online portal that is expected to be available in 3 to 6 weeks.
• Businesses will need access to CRA’s My Business Account portal in order to apply.
• For employers that do not qualify for the CEWS, they can still qualify for the 10% Wage Subsidy announced on March 18, 2020.  More details on this subsidy can be found here.

The Canadian Emergency Business Account (CEBA)

The government will be extending $40,000 loans to qualifying businesses interest-free for one year, of which $10,000 will be forgiven if $30,000 is fully repaid on or before December 31, 2022.

• In order to be eligible the business must have had payroll in 2019 of $50,000 to $1 million
• Businesses must contact their existing financial institutions to apply; however, not all major banks have announced the details of their programs yet
• More details on this program can be found here.

GST/HST Remittance Deferral

To support Canadian businesses in the current extraordinary circumstances, the Minister of National Revenue will extend until June 30, 2020 the time that:

• Annual filers, whose GST/HST return or instalment are due in March, April or May 2020, have to remit amounts collected and owing for their previous fiscal year and instalments of GST/HST in respect of the filer’s current fiscal year.
• Quarterly filers have to remit amounts collected for the January 1, 2020 through March 31, 2020 reporting period; and
• Monthly filers have to remit amounts collected for the February, March and April 2020 reporting periods;
• More details on this program can be found here.

UPDATES FOR INDIVIDUALS

Canada Emergency Response Benefit 

This program will replace the previously announced Canada Emergency Care Benefit and Canada Emergency Support Benefit. Applications are set to become available April 6 through CRA’s My Account portal and will provide a $2,000 monthly benefit for 4 months to workers:

• Who must stop working due to COVID-19 and do not have access to paid leave or other income support.
• Who are sick, quarantined, or taking care of someone who is sick with COVID-19.
• Who are working parents and must stay home without pay to care for children that are sick or need additional care because of school and daycare closures.
• Who still have their employment but are not being paid because there is currently not sufficient work and their employer has asked them not to come to work.
• wage earners and self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance.

To be eligible for the CERB, applicants must have had at least $5,000 in employment income, self-employment income, or maternity or parental leave benefits for 2019 or in the 12-month period preceding the day they make the application.

CRA will begin to accept applications on April 6 and there are specific rules to follow when applying (i.e. based on the month you were born). Please review the details on the Government of Canada website here.

If you do not yet have access to CRA My Account for Individuals, we recommend that you set up your account as soon as possible, as the process can take 5-10 days. If you require assistance from an Accountant Toronto we would be happy to help.

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Many small business owners in Canada are unaware of the various deadlines for filing and payment of taxes for their corporations. It is important to ensure that deadlines are met in order to avoid interest and penalties.

Something that may be helpful is that the Canada Revenue Agency (CRA) has a Business Tax Reminders mobile app to help small and medium-sized businesses remember their tax deadlines. The mobile app lets business users create custom reminders and alerts for key CRA due dates related to instalment payments, returns and remittances.

We have also outlined the 2019 deadlines for you below:

Important Dates for Canadian Small Businesses in 2019

Corporate Tax

General Corporations: Balance of corporate taxes payable two months after your corporate fiscal year-end. If your corporation is expected to be taxable in the fiscal year, the CRA must have received the installments required throughout the year, and the estimated balance amount is due by this date, otherwise interest will accrue on any balance due and not paid.

Canadian Controlled Private Corporations (CCPCs): Balance of corporate taxes payable is due three months after your corporate fiscal year-end. If your corporation qualifies for the small business deduction and is expected to be taxable in the fiscal year, the CRA must have received the installments required throughout the year with the balance amount due by this date, otherwise interest will accrue on any balance due and not paid.

All Corporations in Canada: Corporate tax returns (T2) must be filed within six months of your corporation tax year-end. Returns filed after this date with taxes owing will be assessed a penalty on amounts owing as well as late filing penalties.
 

Payroll

Payroll remittances due on the 15th day of the following month for corporations with less than $25,000 in monthly withholding. If your withholding amount exceeds $25,000 then you may be required to remit on an accelerated schedule, more frequently.
 

GST/HST

The due date of a GST/HST return is determined by the reporting period.

Monthly or quarterly reporting period: the GST/HST return must be filed, and any amount owing must be remitted, no later than one month after the end of the reporting period.

Annual reporting period: the GST/HST return must be filed and any amount owing must be remitted no later than three months after the end of the fiscal year.
 

Information Returns and Slips

Information returns that include T4, T4A, T4A-NR, and T5 must be filed on or before the last day of February in each year and shall be in respect of the preceding calendar year. If the due date falls on a Saturday, Sunday, or public holiday, the information return is due the next business day.
 
If you need accounting or corporate tax assistance and require a Small Business Accountant Toronto please contact us.

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A Chartered Professional Accountant can help your business grow at various stages. They do a lot more than handle payroll, bookkeeping, and taxes. The financial advice they can provide can make or break whether a business survives or not. A big question small business owners have is “when is the right time to hire one?”. However, there is a good reason for hiring an accountant at each stage of a company’s growth.

In The Beginning

There are multiple reasons to consider hiring a Chartered Accountant at the beginning of opening up your small business – they will be an incredibly useful resource, especially if you have never opened or operated a business before. An accountant can help you create a business plan that will include initial budgeting. If you have trouble figuring out financing they can also be of assistance by aiding you with your loan applications.

When opening a small business, a lot of people do not think about the legal structure of it. Not all businesses are built the same, especially in terms of legal organization. Each type of legal structuring has its advantages and disadvantages. A small business accountant will be able to advise you on what type of structure would work best for you. They can also help you figure out other legal aspects like how to pay yourself, how to set up business accounts, and how to hire employees.

Hiring a Chartered Professional Accountant during the early stages will help you in the long run. They have financial knowledge, experience, and advice that could end up saving you a lot of time and money.

After It Is Set Up

If you have already established your small business, or do not need help doing so, then consider hiring an accountant once you are settled. Small businesses take a lot of work to run, with owners usually taking on a lot of the responsibility themselves. Doing the finances for any business is a big job, especially if you are not trained in accounting.

Hiring a small business accountant means they can keep track of your finances, catch bookkeeping errors, manage payroll, and set a budget. Do not worry about the cost of an accountant as most of them more than make up for their price due to the money they save you. When you hire an accountant you get to spend less time on bookkeeping and more time actually running your business.

During Tax Season

For experienced small business owners sometimes an accountant is only needed during tax season. Hiring an accountant for small business taxes can end up saving you a significant amount of money. They will be able to catch any bookkeeping or other financial errors you might have made. They can also find you tax breaks and deductions you might not have known about.

If the government ever audits your business the first things you should do is hire an accountant to get things on track. A Chartered Accountant is trained to deal with audits and can help you recalculate figures, budget for paying more money and prevent you from getting audited again. The best way to not get audited though is to always use a chartered accountant when filing your small business taxes.

Business Changes

Anytime your business is undergoing a major change it is a good idea to speak with an accountant. If your business is expanding that is a good sign, but it almost means there is more to handle. An accountant will be able to guide you through the process. They can also help you with financing new locations, hiring more staff, and expanding your service/products.

Hiring a Toronto Chartered Accountant is also a smart move if you are downsizing or selling. They can prepare any financial reports and records that will be needed for the government and buyers. A small business accountant will also help you get the best value for your business.

There is never a wrong time to hire an Accounting Firm Toronto to help you out. They can provide valuable advice and services that will only aid your small business. So whether you are just starting out or firmly established, consider hiring a Chartered Accountant. Contact us for any of your small business accounting needs.

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An end of the year assessment is important for any company. It is the best way to give you an accurate and updated picture of your company’s finances. There are three types of end of year engagements: audit, compilation, and review engagement. Each differs in terms of scope of work performed and level of assurance provided. Here are the differences between them.

Audit

People always panic when they hear the word audit. This is thanks to the fear surrounding CRA audits that can sometimes lead to people needing to pay large amounts of money or facing criminal charges. An audit engagement is not that though, so rest assured. In this instance, an audit is done so that an independent accountant can take an honest look at company finances and give a fair opinion on them.

A Chartered Accountant will look through financial data to make sure that it fits with government standards and is free from errors and misstatements. An audit is the most intense and thorough end of year assessment. It also provides the most assurance. An accountant will look through documents, assets, and make inquiries. The purpose of an audit is simply to make sure that everything is as it should be.

Review Engagement

An audit is meant to look for misstatements in a thorough manner, but a review engagement is only meant to assess whether a company’s financial statements are believable or plausible. Unlike an audit, a review engagement does not offer as much assurance about whether a company is fully complying. Instead, they offer what is called negative assurance. This just means that the Chartered Accountant is providing assurance that nothing is jumping out as wrong. This differs from an audit, which provides a positive assurance by stating that everything is right. Review engagements tend to be more popular since they are easier, cheaper, and most companies do not require a thorough look.

Compilation

A compilation, also known as a notice to reader, involves an accountant compiling information into financial statements. There is no assurance provided in this instance since the client provides all of the information. A compilation would only be used if a company does not need assurance about their financial data. In this instance an accountant will not be giving an assessment or opinion about the financial data nor do they modify it, they simply compile it into the necessary reports.

Which Do You Need?

Certain industries, businesses, and companies require different end of year assessments. In some instances, these are specified in the legal by-laws. If it is up to you to decide, consult a Chartered Accountant. They will be able to advise you on which would be best for your situation. Contact us today to discuss the end of year assessment options available.

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