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The Canada Revenue Agency and Your Business

Having had my own business for several years and later providing consulting services to another entrepreneur, I have had first-hand experience with the Canada Revenue Agency (CRA). This tale is probably not going to turn out as you think…Cash flow is a challenge for many business owners. In my case, there were a couple of instances when the funds just were not available when it was time to remit the GST to CRA. Having never been in that position before, I was, to say the least, afraid to contact them. When I did get up the nerve to call, they were receptive but cautious. My new payment date was accepted (and yes I had to pay the penalty), but more importantly, they made note of the fact that I chose to address the issue rather than avoid it. In their words, ignoring the issue is the worst thing a business owner (or anyone else) can do.

My consulting experience was another matter. The business I was assisting was in serious arrears. In fact, the situation was so precarious that I couldn’t figure out how they kept their doors open. After making several calls and finding the right department at CRA, I was able to negotiate a repayment schedule. Over two years the business owners were able to pay off $33,000 of tax debt. There were times during those two years when the payment couldn’t be made. The first thing I did in those instances was contact the CRA and advise them of the situation. I have no doubt that the honest and proactive approach was a huge factor in saving the business.

There are no tricks or slick manoeuvers in this process. If you have an issue and need to contact the CRA, don’t do it with the idea of misrepresenting or misleading. Be honest; make sure you are dealing with the right department; and be clear about your problem and how you propose to deal with it.

While my experiences took place more than 15 years ago, times have changed and the CRA has made themselves even more user friendly. The staff are there to assist and as Angela Hilland, the facilitator of our seminar Business Tax: What Every Small Business Owner Should Know(taking place on November 25) pointed out to two young entrepreneurs who were quite apprehensive about contacting the agency, “They put their pants on the same way you and I do in the morning. Nothing to fear.”

We all know that taxes are unavoidable so why not have the right information in your pocket to prevent hiccups along the way. The CRA’s new Liaison Officer Initiative is designed to help business owners “get it right from the start”. It provides in-person support and guidance at key moments in the business life cycle. You may also wish to check out these Canada Revenue Agency links as well:

– Janis Lesko