A Letter to Small Business Owners:
Hope that you are all doing well in spite of this COVID-19 crisis. What a situation this is…
We just wanted to take a moment to let you know that we continue to be fully operational and are ready to assist you with any of your tax/accounting needs. We are all healthy and have been working remotely out of the office since March 16th, 2020. All staff have been asked to adhere to the social distancing and self-isolation recommendations set by government medical officials to ensure that we maintain business continuity throughout this crisis.
You likely would have seen some news around the Federal government’s announcement today on its Economic Response Plan. While we are still undergoing a deeper review of the details, there are some measures put in place to support small businesses like yours. A few highlights that may be relevant for you include:
1 – Providing eligible small employers a temporary wage subsidy for a period of three months equal to 10% of remuneration paid, up to a maximum of $1,375 per employee and $25,000 per employer.
The criteria for this subsidy is somewhat unclear at this stage since the Bill has not yet been passed but this measure appears to include corporations eligible for the small business deduction, as well as non-profit organizations and charities. So, this should provide some relief to most of you, especially those with several employees.
In terms of receiving the subsidy, the general consensus from our counterparts at ADP and other payroll service providers is that this subsidy will come to you in the form of a reduction in your payroll remittances due to the CRA.
It is unclear at this stage whether there is an application process that must be undertaken to confirm your eligibility for this subsidy. We’ll be reaching out to you individually once we receive some more clarity on this.
Note that this subsidy will likely only include T4 employees, not subcontractors or consultants.
2 – The CRA will provide some flexibility for business tax payments and allow you to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020.
This relief would apply to tax balances due, as well as instalments. No interest or penalties will accumulate on these amounts during this period.
Note that this does not include sales tax (i.e. GST/HST) or payroll tax remittances that come due.
3 – Measures are also being taken to ensure that businesses have access to credit through the Business Credit Availability Program (BCAP) which will allow the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide more than $10 billion of additional support, largely targeted to small and medium-sized businesses.
It is my understanding that the banks are all providing relief programs to provide lending and other assistance to help you get through this crisis. So, make sure to reach out to your bank contacts for assistance. It is typically better to get the credit if you can, even if you think that you can ride it out since you never know how long this crisis can last for. We also have contacts with the BDC should you need them. Let me know.
Finally, please note that while you may have heard that the tax filing deadline for individuals has been moved to June 1, 2020, this does not include any of your corporate tax filings. The corporate tax other filing deadlines have not changed, only the payment deadlines have changed.
Check out the following link for full details on the Economic Response Plan:
I’ll leave you with a quote from one of the greats:
“Do not let us speak of darker days; let us speak rather of sterner days. These are not dark days: these are great days – the greatest days our country has ever lived.”
Let’s buckle down, get through this and on to greater days!