If You Owe The CRA Money



Thousands of small business owners across Canada are faced with the same dilemma every day. You have enough money to pay your rent, your employees, or you can pay CRA the GST you collected on their behalf. So, what do you do?

Obviously, you pay your rent or your employees. But now, you owe CRA, and this process tends to repeat itself. 6 months later, you owe the CRA $35,000 and they start calling.

What do you do? Ignore them, right? WRONG!

The CRA has been granted very powerful tools by the Canadian Government to collect taxes on their behalf, and some of their methods can definitely seem to be extreme.

They will start with some informal letters, you will be advised of the debt owing and asked to pay the balance in full. These letters are computer generated and look like standard form letters, because that is what they are.

Section 160 Assessments, What Are They and How Can You Fight Back?


As a small business owner, you have likely heard “put it in your spouse’s name, and you can protect it from CRA”. Well, as usual, advice from your neighbour is not always accurate.

Under Section 160 of the Income Tax Act, the Minister (CRA) can attach liability to another individual that has received a transfer of property when the person transferring the property has an outstanding tax liability.

Note: Section 160 of the Income Tax Act is virtually identical to Section 323 of the Excise Tax Act so the same rules apply to GST/HST liabilities.

So, to make this a little clearer, Jane and Bob are married. Jane owes the CRA $50,000 in taxes and the CRA is getting aggressive. To ‘save the house’, Jane transfers her interest in the home to Bob. Bob now exclusively owns the home.

Using the provisions of Section 160, CRA can assess Bob for the taxes that Jane owes because the transfer was merely a means of avoiding the tax liability.


Ledgers in Partnership with the Law Firm HART Legal!


Ledgers Accounting is always looking for new ways to provide a one stop shop for our customers. We have helped tens of thousands of clients with their tax issues, but many of our clients also have business law issues.

Often, it is as simple as incorporating a company or having employment agreements created. However, from time to time businesses must either initiate a lawsuit or defend themselves against a claim.

In order for Ledgers to better serve our clients, we have teamed up with an innovative law firm in Canada called HART Legal. They currently have 18 law firms. The law firm is able to provide our clients with legal advice since accountants are not allowed to.

“We are extremely excited to be working with a large accounting firm such as Ledgers. The dedication to their clients made Ledgers a good cultural fit for us.” said Alistair Vigier of HART Legal.

(Originally posted on March 6, 2017)


Home Office Expenses, Can You Claim Them? and What Can You Claim?


NOTE: This article concerns home office expenses for a business, not an employee working from home.


Owning a small business can have several perks, one of them being the ability to claim the cost of operating from a home office. In effect, some of your living expenses can become a deductible cost for your business.

There are of course a couple of conditions. To be able to claim home office expenses, you must meet ONE of the two following conditions:

1. It is your principle place of business;
2. You use the space only to earn business income, and you use it on a regular and ongoing basis to meet clients, customers or patients.

Point #2 is a very sticky one; the space must be a distinct and separate area of your home and cannot be used for any other purpose. In other words, using the kitchen table twice a week for processing paperwork does not entitle you to claim home office expenses.

(Originally posted on February 1, 2017)


Ledgers is Opening a New Location in New Westminster, BC!


Ledgers Canada is pleased to announce the awarding of a new franchise in New Westminster. Our newest Network Member Gagandeep Athwal is the proud owner.

Please visit their website at http://newwestminster.ledgers.com for full contact information.