Can you be your own employee? CRA says so… hmmmm

March 19, 2010 by Dan White.

 CRA is on a mission,being, to get as much money as they can. Sometimes it boggles the mind as to how they can be so inconsistent in their approach to businesses.

Being that a lot of people incorporate to pay less taxes, which in itself is a bit of a joke, because in the big picture that belief is unfounded.

We won’t get into the fact that there are thousands of more legal issues that surround being incorporated which makes having a corporation a risky business.

Aside from the extra tax payable, the higher risks, there is a lot more bookkeeping.

And of course more government agency problems. Especially with CRA.

Here is an example of a CRA problem.

Posted in the Globe and Mail, comment by  the Canadian Federation of Independent Business

Published on Thursday, Jan. 14, 2010 8:54AM EST Last updated on Thursday, Mar. 18, 2010 3:33PM EDT

“Employment Insurance claims are most often refused when employees are considered to have a non arm’s length relationship with their employer. In such cases, the number of years paid into EI is not relevant. In general, the Canada Revenue Agency (CRA) does not consider these jobs insurable due to the non-arm’s length relationship that exists, whether through blood (e.g. son), marriage (including common-law) or adoption. Where CRA believes the employer and employee have a job contract similar to one that would apply to an unrelated employee, they are considered to work at arm’s length. In such a case, EI premiums must be paid.”

Dan’s comments:
I find it pretty interesting that CRA does so much sucking and blowing at one time. Their current practice is to go to a single director corporation and deem the director to be their own employee and set up a payroll account for them. Yet they don’t allow that person to collect EI. Of course being that I make a living dealing with CRA issues, it is good for my business of fixing the messes they create. CRA is completely incorrect and inconsistent in their approach, so it is a fixable problem. So; “Long Live CRA” and may they continue to create problems that we get paid to fix.
Dan White
Whitby

To learn more about dealing with CRA go to www.taxauditsolutions.ca

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