If you are a small business owner, then you worry about running your business successfully. You need to keep your customers and suppliers happy, meet payroll and work to expand. The last thing you need to worry about is being responsible for someone else’s tax debt. Unfortunately, the Income Tax Act and the Excise Tax Act can make your business responsible for paying your employees and your supplier’s tax debt. If you don’t comply, you will be dealing with CRA in Oakville collecting from you.
Obviously, the simple answer for dealing with CRA in Oakville is to comply with the order. If it is your employee that owes the money, you can deduct a percentage from their after-tax pay and remit directly to CRA. With a supplier, you send your payment to them directly to CRA instead of to the supplier, or the amount that they owe CRA – which ever payment amount is lower. Out of courtesy to your supplier or employee, you will want to explain to the employee or supplier what you are doing.
I’m discussing this rule because a client of mine recently faced this issue when dealing with CRA in Oakville. What made my client’s situation interesting was that we received a “Second Notice” without getting a “First Notice”. When I called the CRA collection agent, the agent informed me that she sent the First Notice to the taxpayer and not my client. Not exactly an effective method of collecting payment! The troubling aspect of it is that I may have to spend time to fix this error. Problems could arise if CRA sends the “Final Notice” to the taxpayer, rather than my client, and then begin to enforce a judgement against my client.
As I mentioned in a previous blog, always open your mail from the CRA! Dealing with CRA in Oakville doesn’t have to be difficult. If you don’t understand the CRA letter, please do not hesitate to contact me.
William Khalilieh is a Chartered Professional Accountant, based in Oakville, Ontario, who provides practical tax and accounting solutions to individuals and their businesses in the Greater Toronto Area.