We wanted to let you know of recent developments from the Government of Canada, and how we can continue to support you during these difficult times. The majority of our team are now working from home, but are easily accessible by phone or teleconference. We are able to work seamlessly through our cloud-based systems.
This morning, the Prime Minister and Minister of Finance announced a number of measures to assist those who are most affected financially. Of particular note for our corporate and personal clients, the Government will allow any income tax balances due on or after today to be paid by August 31, 2020 without penalties or interest. This also applies to corporate or personal tax instalments for the current year (2020 or fiscal 2021), which would normally be due between now and August 31. It does not apply to HST or payroll tax, which continue to be payable on their normal due dates. Given the uncertainly in the economy, we would advise our clients to take advantage of this income tax deferral, as the economic impact of the COVID-19 virus cannot yet be determined. Once we are closer to this date, we can assist our clients in determining whether instalments for the current year should be paid.
In addition, there is relief available to eligible small businesses (those who qualify for the Small Business Deduction), in the form of a subsidy of up to 10% of remuneration paid over the next three months. This subsidy is capped at a maximum of $1,375 per employee, and $25,000 per employer. The announcement indicates that employers can access this money almost immediately by offsetting the subsidy against employer tax deductions that are due. We recommend waiting until further details are announced before implementing this action.
More details on the programs announced today can be found in this link to the Department of Finance announcement.
For those clients who would like us to do so, we can review what programs and benefits would apply specifically to you and your employees, and assist you in accessing these funds.
We encourage our clients to provide us with all of the information we require to prepare your personal tax returns and corporate financial statements and tax returns on a timely basis. While the deadline for filing 2019 personal tax returns has been extended to June 1, 2020, once the worst of this crisis has passed we will all have much work to do to get back to “business as usual”, and filing of tax returns would just add one more layer to this. We would appreciate your co-operation in this regard. As noted previously, any tax balance owing for 2019 is now payable on or before August 31, 2020, but there is no reason to delay the filing of your return until the June 1 deadline. In particular, if you or your business have a tax refund, it is to your advantage to file your return as soon as possible.
In order to allow us to provide you with our usual level of service, we request that all information be sent to us in electronic form by uploading the documents to your secure portal. Sending information by email is not secure, and receiving it in a piecemeal manner is not efficient. If you need assistance in accessing your portal, please contact Silvana (firstname.lastname@example.org) or Rita (email@example.com). Also, please note that CRA will now accept electronic signatures for the authorization to electronically file your tax returns. When we have documents for you to sign for either corporate, trust, or personal returns, these will be uploaded to your portal, and you will receive a notification. Once you access the portal, you will have the ability to sign and electronically return the documents – no need to print and sign them. This is only available through our portal using Docusign, and not with emailed documents.
We want to remind you that we have implemented online accounting systems for many of our clients, which allows both us and our clients to work remotely and allows us to collaborate easily on their financial information. You may need to request increases in lines of credit, or deferral of loan payments in order to provide liquidity over the next number of months. While the banks have pledged to work with their customers to alleviate the financial burden, they will still want reliable and current financial information on your business. We are available to assist you with this.
Some of our clients may have business interruption insurance that could cover losses as a result of the COVID-19 impact on the business. This is a matter that you should review with your insurance broker to see if you have this coverage. If so, it is important to quantify the losses in order to make a claim for recovery. At this time, the most important step is to ensure that you are maintaining accurate financial records and financial statements in order to support such a claim.
We have also had a number of enquiries with regards to the measures announced today. Please be assured that as more information becomes available, we will monitor and review the information provided by government sources, banks or other agencies relating to financial relief resulting from the impact of the COVID-19 virus.
These are very trying times for all of us, and the situation is evolving rapidly. Please know that the partners and team at Qmulus are here to assist you in any way possible during these difficult times.
Stay safe and healthy!