A few “watch outs”

JUNE 10, 2020

We are impressed by the ingenuity and hard work of our clients. When you're working hard to succeed, we prefer good news to an article about pitfalls. That said, we need to identify a few “watch outs”.

Be careful with delayed income tax and HST payments

For those of you that have deferred large amounts of income tax or HST payments a heads up!

Do not assume that all income tax payments can be delayed until September 1. A quick read of the rules may provide that impression, but beware the fine print.

Only payments due between March 18 and August 30 can be delayed. Final balances owing during this period for personal and corporate tax and tax installments between those dates can be delayed.

If you owe because you didn’t pay installments prior to March 18 then the shortfall should be paid (assuming cashflow permits). There is no interest-free period for balances that were already due.

For HST you must pay the outstanding balances that you have delayed by June 30 in order to avoid an interest charge. The legislation forgives interest only if the balances are paid by the end of June.

Interestingly, it appears to us that CRA is confused as well. We are finding interest charged inappropriately and not charged in other scenarios. So please reach out to us with any assessments that appear to overcharge.

If you have any doubts and owe a material amount please contact your RMT team for specific advice.

CERB and wage subsidy  penalties

These generous programs are having teeth added to penalize those who cheat. And there are whistleblower programs being set up – so if you know individuals that are being aggressive you might want to give them a wake-up call.

This legislation is not intended to slam those in a grey area – but rather to hit hard the abusers who are double-dipping or manipulating accounting records.

Wage subsidy amounts to appear on T4s

Employees T4s will show the amount of wage subsidy that a corporation receives for that individual employee.  So, employees will know how much their employer received to offset their individual salary.

Employers should be aware of this as they consider their messaging to employees.