CRA, the paperwork busters?

Eligible businesses with average monthly withholdings less than $3,000 may remit source deductions quarterly instead of monthly, beginning in the 2008 tax year. The net personal income tax threshold for individuals will be increased to $3,000 from $2,000 — individuals earning less than the threshold do not need to pay installments. This change applies to […]

By Kate McCaffery | April 19, 2007 | Last updated on April 19, 2007
6 min read
  • Eligible businesses with average monthly withholdings less than $3,000 may remit source deductions quarterly instead of monthly, beginning in the 2008 tax year.
  • Qualifying businesses with net tax less than $3,000 will be able to remit GST and HST annually instead of quarterly, beginning after 2007.
  • Businesses with taxable supplies (any taxable sale of goods or services — includes sales that are taxed but also goods and services such as groceries, exports and sales made by farmers, that are zero-rated for GST purposes) not exceeding $1.5 million may elect to have GST and HST reporting periods that are fiscal years instead of fiscal quarters.

    “We were told this impacts about 775,000 businesses if they choose to do this,” says Whyte. “That’s the nice thing — it’s optional. They said you have the option of doing this. They’re not forced to do it.”

    As well, in January 2009, a harmonized corporation return will be introduced as part of the Corporate Tax Administration of Ontario initiative, which will allow businesses to file one annual return to both tax agencies, based on the same filing and payment requirements; offer a common definition of taxable income; allow blended payments; provide one point of contact for both provincial and federal tax information; have one audit covering both federal and provincial tax with one set of audit findings; and implement a single objections and appeals process.

    “Those things are excellent,” he says. “You’re not dealing with two revenue entities; you’re dealing with one. When you harmonize things, it’s a double-edged sword — you’re harmonizing how you submit stuff, but you’re also harmonizing the penalties, but at least you know the rules.”

    Perhaps most interesting for small business tax advisors, however, is the task-force proposal to enhance the My Business Account, beginning in 2007 and 2008, to provide services such as the ability to file GST and HST returns electronically, download previously issued statements, view account balance transactions, and enable representatives to view and transact on behalf of a business. The CRA says any business or individual can name another person to be a representative, using a prescribed consent form. The authorization can be submitted online and allows the person to act on behalf of the business, usually to obtain confidential information from the CRA. The principle is not new but has moved into the electronic realm only in recent years.

    Also, as part of the task-force mandate to improve information presentation and availability, the CRA plans to review the most common errors made by small business taxpayers in order to identify opportunities to improve the content and layout of tax forms.

    The report also outlines a number of initiatives aimed at increasing the use and usefulness of the CRA website, including improved information bundling, the introduction and use of “Smartlinks” that allow users to contact agents for more information directly from a webpage, and deployment of a recently developed CD-ROM tool, designed to increase awareness of the CRA’s electronic services. As well, the task-force recommendations recognize and promote a recently standardized training program for telephone agents, designed to improve the consistency of responses provided by the agency when addressing frequently asked questions and complex topics.

    The agency also plans to update its series of public information and outreach seminars for small business owners to build on a 2006 and 2007 advertising campaign, designed to increase awareness about the CRA’s suite of electronic services.

    Filed by Kate McCaffery, Advisor.ca, kate.mccaffery@advisor.rogers.com

    (04/19/07)

    Kate McCaffery

  • The net personal income tax threshold for individuals will be increased to $3,000 from $2,000 — individuals earning less than the threshold do not need to pay installments. This change applies to the 2008 and subsequent tax years.
  • Eligible businesses with average monthly withholdings less than $3,000 may remit source deductions quarterly instead of monthly, beginning in the 2008 tax year.
  • Qualifying businesses with net tax less than $3,000 will be able to remit GST and HST annually instead of quarterly, beginning after 2007.
  • Businesses with taxable supplies (any taxable sale of goods or services — includes sales that are taxed but also goods and services such as groceries, exports and sales made by farmers, that are zero-rated for GST purposes) not exceeding $1.5 million may elect to have GST and HST reporting periods that are fiscal years instead of fiscal quarters.

    “We were told this impacts about 775,000 businesses if they choose to do this,” says Whyte. “That’s the nice thing — it’s optional. They said you have the option of doing this. They’re not forced to do it.”

    As well, in January 2009, a harmonized corporation return will be introduced as part of the Corporate Tax Administration of Ontario initiative, which will allow businesses to file one annual return to both tax agencies, based on the same filing and payment requirements; offer a common definition of taxable income; allow blended payments; provide one point of contact for both provincial and federal tax information; have one audit covering both federal and provincial tax with one set of audit findings; and implement a single objections and appeals process.

    “Those things are excellent,” he says. “You’re not dealing with two revenue entities; you’re dealing with one. When you harmonize things, it’s a double-edged sword — you’re harmonizing how you submit stuff, but you’re also harmonizing the penalties, but at least you know the rules.”

    Perhaps most interesting for small business tax advisors, however, is the task-force proposal to enhance the My Business Account, beginning in 2007 and 2008, to provide services such as the ability to file GST and HST returns electronically, download previously issued statements, view account balance transactions, and enable representatives to view and transact on behalf of a business. The CRA says any business or individual can name another person to be a representative, using a prescribed consent form. The authorization can be submitted online and allows the person to act on behalf of the business, usually to obtain confidential information from the CRA. The principle is not new but has moved into the electronic realm only in recent years.

    Also, as part of the task-force mandate to improve information presentation and availability, the CRA plans to review the most common errors made by small business taxpayers in order to identify opportunities to improve the content and layout of tax forms.

    The report also outlines a number of initiatives aimed at increasing the use and usefulness of the CRA website, including improved information bundling, the introduction and use of “Smartlinks” that allow users to contact agents for more information directly from a webpage, and deployment of a recently developed CD-ROM tool, designed to increase awareness of the CRA’s electronic services. As well, the task-force recommendations recognize and promote a recently standardized training program for telephone agents, designed to improve the consistency of responses provided by the agency when addressing frequently asked questions and complex topics.

    The agency also plans to update its series of public information and outreach seminars for small business owners to build on a 2006 and 2007 advertising campaign, designed to increase awareness about the CRA’s suite of electronic services.

    Filed by Kate McCaffery, Advisor.ca, kate.mccaffery@advisor.rogers.com

    (04/19/07)