Corporate Income Tax, Personal Income Tax, Small Business

Emergency Response Benefit and BC Response

Canada Emergency Response Benefit


Yesterday, March 25, the Federal Government issued a news release outlining details of the new “Canada Emergency Response Benefit” (CERB).  The CERB replaces the previously announced Emergency Care Benefit and Emergency Support Benefit.

The CERB will provide $2,000 per month for up to four months for Canadians who:

  • have lost their job
  • are sick
  • are quarantined
  • are caring for someone who is sick
  • is a working parent who must stay home without pay to care for children who are sick or at home because of school closures
  • are still employed (have not been laid off), but are not receiving income because of disruptions to their work situation

This benefit will apply to Canadians that are employed, as well as contract workers and self-employed individuals that would not otherwise be eligible for EI.

Canadians who are already receiving EI will continue to receive their benefits and should not apply for the CERB.However, if their EI benefits end before October 3, 2020, they could apply for the CERB.

A new web portal for accessing the CERB will be available in early April.  We will send a link out to this when it is made available.  Individuals eligible for EI can continue to apply for EI here.

It should be noted, though the news release doesn’t say so, that this benefit will be Taxable, similar to EI.  We have found that Service Canada RARELY withholds enough tax and so anyone receiving EI or the CERB should be prepared to have taxes payable when filing their 2020 tax returns in April next year.

The full release is available here

BC Government Response

The BC Government has also released details of how they will respond to COVID-19.  Some highlights are as follows:

Businesses

The BC Government is extending filing and payment deadlines until September 30, 2020, for the following:

  • Employer health tax
  • Provincial sales tax (including MRDT)
  • Carbon tax
  • Motor fuel tax
  • Tobacco

School tax created for some commercial properties will be reduced by 50% for 2020.


Individuals

The BC Emergency Benefit will provide a one-time payment of $1,000 to those who receive EI or the CERB.  This looks to be a separate application and will be open “soon”.  The payment will be paid in May 2020.

The Province has introduced a BC Temporary Rental Supplement (BC-TRS) of $500 per month which will support renters and will be paid directly to landlords on their behalf.  Applications will be made through the BC Housing website in early April.  There has also been a halt on evictions and rent increases.

The Climate Action Tax Credit which gets paid with the GST credit to low to moderate-income families will be increased for the July payment only.

BC Hydro will be allowing customers to defer bill payments and arrange flexible payment plans without penalty.  They have also provided access to a grant of up to $600 for those who have lost their job, are ill or have lost a family member.  Customers are directed to call 1 800 BCHYDRO.

Lastly, ICBC is allowing customers to defer payments up to 90 days without penalty.  Application for the deferral can be made through the online resource tool.

More details from the Province can be found here.

Best regards,

Andrew de Verteuil, CPA, CGA
de Verteuil & Company Inc.

Corporate Income Tax, Small Business

Canada’s Wage Subsidy for Employers

The CRA has released details on how the temporary wage subsidy for employers, which was announced by the federal government last week, is going to be managed.

To be eligible, an employer must:

  • Be a non-profit, a registered charity, or a Canadian controlled private corporation (CCPC);
  • Have a payroll account with the CRA on March 18th 2020; and
  • Pay salary, wages, bonuses, or other remuneration to an employee.

  Note: CCPCs are only eligible for the subsidy if their taxable capital employed in Canada for the preceding taxation year (this would be 2019) calculated on an Associated group basis, is less than 15 million.


To receive the subsidy, remittances for federal, provincial or territorial income tax that would normally be sent to the CRA will be reduced by 10% of the gross pay employees.  The subsidy will not reduce remittances for CPP or EI.

The subsidy is equal to 10% of the wages paid to employees between March 18, 2020 and June 20, 2020, up to $1,375 per employee to a maximum of $25,000 per employer.  Note these caps are not per pay run, but rather for the full period.  

Associated CCPCs will not be required to share the subsidy of $25,000 per employer.

For example, if you have five employees earning monthly salaries of $4,100 each, for a monthly payroll total of $20,500, the subsidy would be 10% of $20,500 or $2,050.  This would apply for each payrun that takes place between March 18th and June 20th.

There is no application process for this subsidy and if remittances are not reduced by the employer, subsidy will automatically be credited to the payroll account.  This credit could be applied against the 2021 remittances or refunded.

Lastly, it is important to note that the subsidy is considered taxable income, and so must be included as income on next year’s tax return.

The CRA’s FAQ can be found here: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-wage-subsidy-small-businesses.html

If you have any questions please feel free to reach out to us.

 
Best regards,

Andrew de Verteuil, CPA, CGA
de Verteuil & Company Inc.

Corporate Income Tax, Personal Income Tax, Small Business

Canada’s COVID-19 Economic Response Plan

The federal Government has now released Canada’s COVID-19 Economic response plan. These items are still very new, so we are developing our understanding as they are released, but if you have any questions please reach out to us.

Below are the highlights from the plan that we see:

Taxpayers

  • Individuals: The April 30 deadline has been extended until June 1, 2020 (we are encouraged to file on the normal timeline though because of credits and benefits like the GST Credit and Canada Child Benefit (discussed more below) that depend on the tax return for calculations
  • Businesses: Changes to income tax payments (as below), but no mention of changes to filing deadlines or GST payments or filing deadlines sadly
  • Taxes Due: Income tax amounts, including instalment payments, that become owing on after March 18, 2020 and before September 2020 (i.e. August 31) will be allowed to defer payment until August 31, 2020 without interest or penalty.

Businesses

  • Businesses eligible for the small business deduction will be eligible for a temporary wage subsidy for a period of three months. The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. Businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration. 
  • The Business Development Bank of Canada (BDC) and Export Development Canada (EDC), through the Business Credit Availability Program (BCAP) will provide $10 billion of additional support for individual businesses, including in sectors such as oil and gas, air transportation and tourism. 
  • Credit available to farmers and the agri-food sector will also be increased through Farm Credit Canada.

Income Support for Workers and Parents

  • Waiving the one-week waiting period for those individuals in imposed quarantine that claim Employment Insurance (EI) sickness benefits. This temporary measure is in effect as of March 15, 2020.
  • Emergency Care Benefit providing up to $900 bi-weekly, for up to 15 weeks. To provide support to:
    • Workers, including the self-employed, who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits.
    • Workers, including the self-employed, who are taking care of a family member who is sick with COVID-19, such as an elderly parent
    • Parents with children who require care or supervision due to school closures, and are unable to earn employment income, 

                     All apply irrespective of whether they qualify for EI or not.

Application for the Benefit will be available in April 2020, and require Canadians to attest that they meet the eligibility requirements. They will need to re-attest every two weeks to reconfirm their eligibility. Canadians will select one of three channels to apply for the Benefit:

  1. by accessing it on their CRA MyAccount secure portal;
  2. by accessing it from their secure My Service Canada Account; or
  3. by calling a toll free number equipped with an automated application process.
  • Introducing an Emergency Support Benefit delivered through the CRA to provide up to $5.0 billion in support to workers who are not eligible for EI and who are facing unemployment.
  • Implementing the EI Work Sharing Program, which provides EI benefits to workers who agree to reduce their normal working hour as a result of developments beyond the control of their employers, by extending the eligibility of such agreements to 76 weeks, easing eligibility requirements, and streamlining the application process.

Income support for low to moderate income families

  • One time doubling of the GST Credit to be made in May 2020 (boosting the credit by $400 for single individuals and $600 for couples)
  • Increase the 2019 – 2020 Canada Child Benefit maximum by $300 per child (note the maximum gets ground down depending on income level)
  • Required RRIF withdrawals will be reduced by 25% for 2020 due to the volatile market
  • The Reaching Home initiative will receive $157.5 million to support the homeless
  • Women and children fleeing violence will receive up to $50 million through shelters and sexual assault centres

Mortgages and Banking

  • Banks in Canada will work with customers to provide solutions for managing through hardships caused by pay disruption, childcare disruption, or illness. Canada’s large banks have confirmed that this support will include up to a 6-month payment deferral for mortgages, and the opportunity for relief on other credit products.
  • CMHC will permit lenders to allow payment deferral beginning immediately.
  • Under the Insured Mortgage Purchase Program (IMPP), the government will purchase up to $50 billion of insured mortgage pools through the Canada Mortgage and Housing Corporation (CMHC). 

 
Best regards,
Andrew de Verteuil, CPA, CGA
de Verteuil & Company Inc.

Corporate Income Tax, Personal Income Tax, Small Business

What COVID-19 Means for Tax Season

As the COVID-19 situation is changing daily there is a lot of uncertainty surrounding business and tax obligations. At de Verteuil & Company Inc., which is the Tax & Accounting Team of Ivory Planning Group and also an independent firm, our primary concern is for the well being and health of our employees and clients. To this end, our bookkeeping, tax and accounting team members will all be working remotely effective immediately. As our core tools are web and cloud-based, our plan is to continue to provide our services without interruption.

Today, March 17th, 2020, the National Post has announced an extension to the tax filing deadline, but this is not yet confirmed. Until we learn otherwise, we should expect that most personal tax returns are due to be filed by April 30 and returns of individuals with self-employed income are due to be filed by June 15. We will update clients if this changes.

If you are not already, we strongly encourage our clients to use the digital tools we offer such as the Karbon checklist that is sent as we begin working on a file, Receipt Bank and the File Drop link on our website. If you don’t have a scanner, these tools can be used with the camera on your phone. If you need help, please contact us. We would like to stress that sending personal documents that may have a SIN on them via email is not considered secure. If you are unable to send documents electronically, we ask that you have them mailed rather than delivering them in person.

If you are looking for current guidelines on best practices for business and COVID-19, we found some excellent information here:

The BC Government has released information about COVID-19 and the workplace, which can be found here in the FAQ.

If ever you have any questions or concerns, please don’t hesitate to reach out to us.
 
Best regards,
Andrew de Verteuil, CPA, CGA
de Verteuil & Company Inc.

Personal Income Tax

We’ve Moved!

Our office will be closed beginning on Tuesday April 30th and will reopen at 8:30am on Monday May 6th.

If during this period there are any urgent needs, please call our office at 604-638-6964 and select the option for the emergency line.

Our new office address effective May 6th:
CRU 210-9084 Glover Road
Fort Langley, BC V1M 0E6

The entrance is on the north side of the building. You can reach our office on the second floor by either going up the stairs or go through the second door to the elevator.

Your patience is appreciated during this time.

Corporate Income Tax, Small Business

We Owe How Much? … OUCH!

Manage cash flow better by projecting future tax liabilities.

Unforeseen circumstances often leave owner-managers short of the cash needed to pay federal and provincial taxes. Unfortunately, many owner-managers consider unpaid tax bills to be the same as unpaid trade credit. They are not. Unpaid taxes can cause a lot of problems. Ensuring funds are available to pay obligations to the Canada Revenue Agency (CRA) should be a top priority for any business, whether incorporated or a sole proprietorship. Continue reading

Small Business

New 2018 CRA Allowances for Company-Use Vehicles

Owner-managers should discuss Canada Revenue Agency (CRA) changes to employee vehicle allowances with their CPAs before announcing any changes to company policy.

To keep up with the rising costs of operating vehicles, Revenue Canada has increased the maximum tax-exempt car allowance deductible for employees to 55 cents per kilometre for the first 5,000 kilometres, and to 49 cents per kilometre for distances travelled in excess of 5,000 kilometres. Continue reading

Corporate Income Tax, Small Business

Small Business and the CRA

Ensure your books are always in order for the CRA.

Owner-managers work hard in their businesses but are often overwhelmed by the reporting requirements for the Canada Revenue Agency. Few owner-managers enjoy the time spent and cost required to meet the CRA requirements, let alone the actual taxes that have to be paid; nevertheless, owner-managers must establish good business habits to ensure they stay on the right side of the tax authorities.

So, here are a few suggestions on how to make your relationship with the CRA much easier for yourself over the long run. Continue reading