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President/CEO Number Crunchers® Accounting Inc. Learn how to just say stuff it to this bookkeeping thing with our 'Just Say: "Stuff It" To Bookkeeping program.

How to Manage your Personal Finances During the Pandemic

By Randall Orser | Budget , Covid-19 , Personal Finances

The Covid-19 pandemic is causing financial stress for most Canadians as they are seeing their income reduced or eliminated and they are wondering how they will be able to pay their bills.

All levels of government have implemented emergency response plans including financial support and many financial institutions have stepped up to help by allowing people to defer payments and avoid penalties.  Here are some ways that you can reduce the financial impact of Covid-19.

The federal government started the $107 billion Covid-19 Emergency Economic Response Plan, with $52 billion direct support for employers and workers and $55 billion in tax deferrals for workers and businesses. Other financial assistance to families include:

  1.  A one-time increase to the GST tax benefit and increases to the Canada Child Benefit.
  2. A six-month interest free moratorium on the repayment of student loans'
  3. A 25% reduction in minimum withdrawals from a RRIF and variable benefit payments under a RRSP to help reduce the impact of volatile markets on senior's retirement savings.
  4. There are additional benefits to Canadians available from their province and municipality and they should visit the relevant websites for more details.
  5. Financial institutions are offering deferrals of mortgages up to six months for some customers as well as loans and relief on credit card payments and interest.

What can Canadians do to help themselves financially during the pandemic?

  • If you need to borrow money make sure that you consider the interest rates and how you will repay the loan, do not dig yourself too far into debt that it will be difficult to get out of once the pandemic is over.
  • If you have to tap into your emergency funds do it strategically, maximize all income sources first, create a more stringent budget and spending plan then consider tapping into your savings if you need to.  Always start with cash funds and TFSA's as you will not have to pay tax on that income and withdraw RRSP's on non-registered tax investments as a last resort.
  • If you are still working making saving money a priority after you have covered your necessary expenses this will help you should your job become affected.
  • Maximize help programs from utility companies that can include lower rates, deferred payments and flexible payment plans to assist residents and companies.  Many cell phone providers have removed data caps on internet and data plans and waived countrywide long distance fees.  They are also offering flexible payment plans.
  • Consider which bills you can eliminate such as subscriptions to digital services or retailers, and monthly donations.

It is important to continually assess your financial situation and if you can make changes that will help you to be more prepared for the future.

From an article by Sophie Nichols Jones 

How to Manage Flexible Work Arrangements for your Business

By Randall Orser | Employees , Small Business

Prior to the pandemic employees were already looking for new incentives to keep themselves motivated and engaged including the most popular one flexible working arrangements.

From an employers point of view offering flexible working means that there are some hurdles to be overcome. These can include the feeling that not making full use of the office space that they have invested in is a waste of money and secondly how can they make sure that their employees are being productive if they are not continually supervising them?

Due to the pandemic many more employees are working from home employers have had to change their mindset to embrace this.  For example instead of measuring the amount of hours spent at their desks they need to measure their employees productivity. Previous research into flexible working arrangements showed that employees have a greater degree of job satisfaction and higher productivity rates when they work away from the office.

It is true that flexible working arrangements do not work for every business especially if face-to-face contact with clients is important. However during the pandemic many businesses are getting around this by setting up Zoom meetings with their clients.  

Flexible Work Locations:

Offering flexible work arrangements will include work locations.  Employees can work in the office part of the week and from outside the office the remainder of the week whether it be at home or at another remote location of their choice.  Alternatively they can work entirely out of the office and just be in the office for special training, staff meetings or special events.  One advantage to this system is that employers do not have to hire talented workers who live locally instead they can hire from the best talent available in the industry wherever they live.

Flexible Schedules:

Instead of the 9-5 schedule required in the office employers can allow workers to set their own eight hour work day within a 12 hour period, or they can work 10 hour days for four days a week.  This schedule could be subject to change after a 3 or 6 month time period depending upon the requirements of the company.  

Job Sharing:

Job sharing allows two employees to share one full time job.  Sometimes an employer cannot find a person to work full time but can find two employees who can share the tasks which often happens in businesses that hire from an employee pool including students, mothers and seniors.  The benefit of this to the employer is that they often do not have to pay the same benefits to part time workers that they pay to their full time staff thereby saving on overhead.   The downside is that the employer will responsible for coordinating the work between the two employees to make sure that all the required tasks are completed and that everyone is on the same page.

Although flexible working comes with advantages and disadvantages for both employers and employees these arrangements were becoming more popular but the outbreak of Covid-19 has seen an  unprecedented move from office to home working.  It will now remain to be seen how many companies will continue to have their employees working remotely.

From an article by Alyssa Gregory

Four Things Not to Do While Working at Home During the Pandemic

By Randall Orser | Business , Cloud-computing , Employees , Freelancing

Many people and businesses were already considering working from home prior to the pandemic, but once social distancing became a reality it accelerated the movement from office to home working.  This has been a massive and sudden transition for everyone involved and it has brought about a new way of working for many of us.

While many thought that they would easily embrace working from home, many also found that it has a set of challenges to overcome.  So whether you are enjoying this new way of working or you are struggling here are a few things that you could do to make your working at home experience more positive and productive.

  1. Don't be Overwhelmed by Small Details  -  Don't be stressed by the sounds around you such as traffic, children and pets which can make your working conditions less than ideal. Other people are also dealing with these distractions, so when you make video or phone calls make light of your less than ideal working conditions to relieve your own anxiety.
  2.  Don't wear pyjamas all day and don't take video or phone calls while still in bed or in the washroom. As much as possible remain professional in your interactions with clients and peers. Get into the work mindset, dress appropriately and allow yourself the usual breaks that you would take if you were in the office.  Try and keep your work routine as normal as possible.
  3. Don't go silent, make sure you keep lines of communication open with other work colleagues and team members.  Set up regular check in times and video meetings this will provide you with regular updates and keep you feeling like you are still an important part of the team.
  4. Don't work in uncomfortable conditions.  It is easy to set yourself up with your laptop in bed or on uncomfortable chairs at the dining table but this will result in aches and pains which will distract you from the tasks that you are trying to complete.  Even if it is only a desk and chair in the corner of your bedroom, set yourself up with a comfortable and ergonomic workspace.

From Dr Laura Hambly on Global News

Planning for the Future of Your Business

By Randall Orser | Business , Retirement , Small Business

In 2011 the Canadian Federation of Independent Businesses conducted a poll that revealed that only 10% of small business owners had a succession plan.  As a small business owner you need to plan for your company's future change of ownership.  A careful exit strategy will help you to maintain the value of your company and your legacy and will ensure a smooth transition to a new owner.

A good succession plan will maintain positive relationships with employees and business partners that will help to bring a good sale price.  It will provide financial security for your heirs and other stakeholders as a plan is in place to deal with unexpected events such as death or illness.

Changes in ownership can be stressful for employees, suppliers and customers so your succession strategy needs to include communication plans to make sure that everyone is kept informed during the changeover thereby ensuring that the business continues to run smoothly.

If you expect to be leaving your business within the next five years you need to start planning right away.  Even if your business is fairly new you need to have a plan in place should the unexpected happen.  

Susan Ward a Canadian business writer says that 70% of businesses do not survive the transition from the founder to the second generation due to poor or no planning, and she offers the following tips for succession planning:

  1. Start business succession planning early, five years in advance is good, ten years is better. Think about including a business exit strategy right into your initial business plan.
  2. Make sure that you involve your family in all business succession planning discussions.  This will help to ensure that everyone is aware of your plans.  It is important to pay attention to the personal feelings, ambitions and goals of all members of the family who might be directly involved with the succession.
  3. Plan realistically, if your children do not have the skills or have no interest in taking over the company from you then consider a different family member who might be more capable.  If there is no one in the family to take over the business then you should consider selling it.  Whatever you decide it should be in the best interests of the business that you have worked hard to make successful.  
  4. Don't plan for everyone to have an equal share in the business.  It is fairer for those who have an active part in running the business to have a larger share of the ownership of the business than non active family members.  You could also transfer complete ownership to your chosen successor and make other financial arrangements for other members of the family.
  5. Make sure that you work with and train your successor for a few years so that they are ready and able to take over the reins should the need arise.  It can be difficult to teach someone your business skills and share decision making but it will be in the best interests of the business. 
  6. Make sure that you get outside help with your succession planning from your lawyer, accountant and financial planner.  They will help you to put together a good plan as well as plan asset transfer tax strategies to minimize taxes due upon your death. 

​From an article by Susan Ward and Freedom 55 Financial

Covid-19 Now is the Time to get Serious About Your Financial Wellness

By Randall Orser | Budget , Personal Finances , Personal Income Tax , Retirement

A survey done for the MNP Consumer Debt Index when the Covid-19 pandemic started showed that 49% of Canadians asked were $200 or less away from being able to settle their bills and 25% of these people said they were already behind on their payments. In this uncertain economic environment are many are unable to realize their life goals and some even face bankruptcy.  

Lack of financial security is a big cause of stress, lack of sleep and tension in relationships as people and couples are unsure about what their future will look like.  In fact 41% of Canadians say that money concerns are the biggest cause of stress in their life  The fear of the financial impact of the pandemic is a greater contributor to mental health than getting sick or losing a loved one.

This information begs the question "Why are people finding themselves in this financial predicament? There are a number of answers to this question including costs rising faster than wages which has caused many to incur debt, but the big reason has to be ignoring the necessity of financial planning.  Financial planning includes saving for the future, retirement and making informed financial decisions and living within one's means and building a emergency fund. The pandemic brings to the forefront this long avoided issue, it is time to become responsible for your financial health. 

Many use the lack of financial knowledge as a reason for not planning. This is no excuse for avoiding the issue as financial literacy can be gained from books, seminars, blogs, websites and from working with a financial planner, there is lots of help out there.  Here are some tips that may help your immediate financial situation:

  • Make a new financial plan, your income may have been reduced and you need to revise your budget and priorities accordingly.  If you are not able to pay your bills, you should not be contributing to your child's college fund making contributions to your RRSP.   
  • Don't worry about paying down debts quickly, make minimum payments and put the rest into an emergency fund.  Your emergency fund should be enough to cover three to six months of  expenses should your income be severely reduced.
  • Take advantage of the help that your bank may be offering such as reduced interest rates on credit cards, deferred mortgage payments and low interest loans or lines of credit to pay off higher interest debts.
  • Instead of making plans for the next 10 or 20 years make your financial plans cover a shorter period of time. 

Making the decision to start taking control of your finances or making your financial goals more realistic will help you to deal with the stress that the pandemic is causing.

See our previous articles for more information:

​Financial Skills you Should Have Learned in High School

Reasons why you Should Budget your Money

Charging PST on Online Sales

By Randall Orser | On-line sales , Sales Taxes , Small Business

If you are a business that does online sales have to collect and remit taxes just the same as if you had a bricks and mortar business.  This means that you will need to charge and remit other province's sales taxes and different rules in different provinces can make this process complicated.  

Businesses need to register as a provincial sales tax vendor with each province where they will be doing business. Unfortunately, there is little that can be done get around this additional paperwork and bookkeeping, except for to limit the provinces where you ship goods, for example if businesses only sell products to consumers in their own province or if they only sell non-taxable goods and services.

Provincial sales taxes vary by province. There is also the goods and services tax and some provinces use the harmonized sales tax which combines the GST with their provincial sales tax.   For businesses selling only within their own province or territory they only need to follow the rules for their province, but for those selling to other provinces they must charge taxes according to the rules in those provinces.  

  • In BC if the business specifically targets customers in BC through advertising or similar means that they are targeting customers in that province and they are therefore expected to collect and remit PST.
  • In Manitoba out of province businesses must register as a vendor if they solicit sales, the orders originate, the goods are used or goods are shipped to that province.
  • In Saskatchewan all businesses selling online order to customers there are expected to collect and remit PST.
  • In Quebec out of province businesses must register before selling goods to residents there.
  • In Alberta, Nunavut and the Yukon there is no PST.
  • New Brunswick, Newfoundland and Labrador, the Northwest Territories, Nova Scotia, Prince Edward Island and Ontario charge the HST.
  • BC, Manitoba, Quebec, and Saskatchewan charge the GST and a PST.


From an article by Susan Ward

How to Close your GST Account with the CRA

By Randall Orser | Sales Taxes , Small Business

There could be a few different reasons why the time may have come for you to close your GST account with the CRA.

  • If your total taxable revenue (before expenses) has dropped below $30,000 in the last four consecutive calendar quarters then you can apply to regain your small supplier status and no longer collect and remit GST.  However, you must have been registered for GST for at least one year before they will close your account.
  • If you sell or close your business
  • If you no longer make taxable supplies
  • If you are in receivership, a receiver appointed by the courts may take control of your existing GST account until the closure of the business, and your GST account will also be closed at that time.
  • If you are filing for bankruptcy you will need to send copies of the court issued bankruptcy documents to the tax services office.
  • If you are merging or amalgamating with another business.  In this case the CRA may either issue a new business number or allow the reuse of the existing business number.
  • If the business is a sole proprietorship and the owner dies, the heirs or agents will be required to close the account and file a final return.
  • If the business is a partnership and one partner leaves or dies.  Depending on the circumstances the existing number may be reused or a new one might be required.

To close your account you need to complete form RC145 Request to Close Business Number Accounts and send it to your tax services office.  You must also make sure that you file any outstanding GST returns for the period up to the date the account is closed and pay any remittances due.  If you are closing the business you are assumed to be disposing of the assets of the business and that you have collected GST on these sales.  You will need to determine the fair market value of these assets and report this on the return.

If you do not close the account the CRA will assume that you are still in business and will expect you to file returns.  If your business is closed or inactive you can file nil returns until your business starts up again, but if you continue to file nil returns for several years the CRA may contact you to ask if you want to close the account.  If you stop filing returns and don't close the account the CRA will require you to file for the missing dates and if you do not respond you can expect to receive a phone call or visit from from a CRA officer.  If your business is still open and you are not filing returns you will be prosecuted under the Excise Tax Act and you will be liable for penalties and interest.

From an article by Susan Ward

What are the Penalties for Filing a Late GST/HST Return?

By Randall Orser | Business , Retail , Sales Taxes

Businesses that have registered to charge and collect GST must file a return to the CRA at intervals determined by the CRA. Depending upon your business income you may have to file monthly, quarterly or annually. If a business misses it's filing deadline it may be subject to penalties.

The CRA says that if a business has a zero balance GST account or it is owed a refund from the CRA then it will not get any late penalties.  If a business does owe a balance and files a late return then late penalties will be applied.  GST penalties are 1% of the balance owed, plus the result of the calculation of 25% of the 1% x the number of months the return is overdue to a maximum of 12 months.

For example:   1% of $20,000  = $200

                        (25% of $200) x  6 (months)    = $300

                        $300 + $200 = $500 total penalties

In addition the CRA will charge interest on any overdue amount equal to the 90 day Treasury bill rate plus 4%.  This also applies if you have been instructed to make instalment payments and you do not pay by the due date.

There are other penalties that you can incur by not filing a GST return on time.  If you receive a demand to file a GST return and do not do so then a penalty of $250 will be charged.  If you fail to file electronically when required to do so you will be charged a penalty of $100 for the first offence and $250 for each instance afterwards.

What happens if you file an incorrect return?

  • If you make a genuine mistake for example forgetting to include an Input Tax Credit you can include it on a subsequent return.  You have up to four years to claim a missing ITC
  • For other errors such as incorrectly reporting the amounts of GST collected or collectible you will have to request an adjustment of the reporting period affected and this can usually be done through your My Business Account
  • If you have deliberately incorrectly reported and wish to correct this at a future date you use the CRA voluntary disclosure program and pay amounts owed and hopefully avoid penalties and prosecution, although filing through this program does not automatically mean that your request will be granted.
  • If you file an inaccurate return you can be subject to a penalty of 5% of the amount plus 1% per month of the difference between the amount you initially reported and the actual amount up to a maximum of 10%.

It is worth also noting that you cannot claim any income tax deduction for penalties or interest that you may have to pay if you file your GST report late. 

From an article by Susan Ward

Which Goods and Services are GST Exempt or Zero Rated?

By Randall Orser | Business , Retail , Sales Taxes

If think that your new business may have to charge GST/HST you need to know the difference between zero rated and exempt goods and services because not all businesses need to charge this tax.

For the customer there is no difference between GST exempt and zero rated goods as in both cases they are not charged the tax.  For businesses there is a difference in how the two classes of goods and services have to be entered onto the GST return.  Normally when completing the return a business can claim input tax credits to recover the GST paid or owed on business purchases and expenses.  

  • For zero rated goods a business does not charge or collect GST but can still claim ITC's on it's GST return.
  • For exempt goods and services the tax is not charged or collected and Input Tax Credits cannot be claimed.

Which goods and services are zero rated?

  • Basic groceries but this does not include items not necessary for dietary needs such as snack foods, liquor, soda and candy.
  • Most fishery products except those used for bait.
  • Farm livestock sold for human consumption, GST is charged on livestock sales not used for human consumption such as horses, dogs, and cats.  Animals such as rabbits and goats will be zero rated if sold for consumption or GST will be charged if they are sold as pets.
  • Farm equipment such as tractors, seeders, planters and processing equipment.
  • Prescription drugs and dispensing fees are zero rated however drugs sold over the counter are subject to GST.  
  • Medical devices such as artificial teeth, walkers, wheelchairs, canes, eyeglasses, contact lenses and orthotics and others are zero rated.
  • Freight transportation services involving the movement of goods from Canada to other countries and vice versa.

Which good and services are exempt?

  • Used residential housing, GST is only charged on new or substantially renovated housing.
  • Residential rental accommodation if equal to or greater than one month duration.
  • Music Lessons
  • Medical and dental services except for procedures deemed to be non healthcare-related such medical reports, disability certificates and cosmetic surgery to enhance someone's appearance.
  • Issuing insurance policies 
  • Educational services leading to a certificate or diploma, upgrade certification or tutoring services for a designated school curriculum.
  • Most goods and services provided by a charity.
  • Financial services such as fees for bank accounts.
  • Legal aid services
  • Day care services for children aged 14 or younger
  • Food and beverages in an educational institution

Some goods and services that are exempt from the federal GST are not exempt at the provincial level in provinces that charge a provincial sales tax so they are subject to the tax.  As each province is different businesses should refer to the exemption list for the province in which they are doing business.  For British Columbia check  PST Exemptions.

From an article by Susan Ward

How to Pay the GST/HST that Your Small Business Owes

By Randall Orser | Business , Sales Taxes

If you are a small business whose total taxable revenue before expenses is $30,000 or less in the last four consecutive calendar quarters or a public service such as a non-profit organization with total tax revenues of less than $50,000 in the last four consecutive calendar quarters you are classified as a GST/HST small supplier and you do not have to charge GST/HST.  That applies unless you are a taxi or limousine operator or a non-resident performer who sell admissions to seminars or other events, who must register for GST no matter how small their income is.

If you do not qualify as a small business then you will need to charge, collect and remit GST.  To start the process you will need to register for a GST account with the CRA.  You will then keep track of all the GST that you charge or pay and complete a GST tax return each quarter or assigned reporting period which can also be monthly or annually depending upon your total taxable supplies of goods and services in the previous fiscal year when you register.

Even if you do not qualify as a small supplier it may be to your advantage to register for the GST.  Though you will be paying GST on the goods and services that you use in the course of your business you will also be able to recover some of the GST that you paid out on business purchases through  Input Tax Credits.

You must submit your GST returns on time according to your reporting period schedule even if you have not conducted any business or collected any GST during that period.  On each report you will show the amount of GST that you charged your customers and the amount of GST that you paid or owe your suppliers.  The difference between these two amounts is the amount of tax you will pay.  Of course it is not as simple as it sounds as you may have GST charged but not paid to you and bad debts adjustments so you may need to refer to   RC4022 - General Information for GST/HST Registrants for help.  

When your form is completed you have a number of ways that you can pay the amount you owe.

  • Pre-authorization - authorize the CRA to take a take a payment from your bank account
  • Make your payment on line or phone it in through your bank's telephone and online banking services, or pay it in person at your bank.
  • E-transfer, credit card or PayPal
  • By cheque through snail mail using the personalized GST return form sent to you by the CRA.
  • Electronically - the CRA encourages all registrants to use electronic GST filing methods through Netfile,  Telefile, Electronic Data Exchange, or GST Internet File Transfer. 
  • CRA My Business Account which also allows you to manage other tax related payments such as payroll, corporate income tax, excise tax.

If you do not File a GST return on time, unless you have a $0 balance you will be subject to penalties. 

From an article by Susan Ward