We hope this finds you well. At H&Co, we are happy and relieved that none of our clients, friends or staff have been taken ill with COVID. We continue to maintain all sensible and required precautions.
A few small points that we wanted to raise.
1) Canada Emergency Business Account ($40k interest-free loan)
The application window for this loan keeps being extended – now open to October 31.
The government has significantly relaxed the eligibility criteria since the program was launched, so fewer businesses are inadvertently excluded. See https://ceba-cuec.ca/
However, we’re definitely seeing a much more rigorous evaluation of whether or not a business is eligible to apply.
Please let us know if you’ve had challenges.
2) Canada Emergency Wage Subsidy – still rolling on….
Please see our earlier blog post for more details: CLICK HERE
The program changed significantly in early July (and people could apply for the July subsidy in August). We’ve now worked through quite a few “new rule” applications with our clients.
Key takeaway: Many more businesses are eligible to apply than under the “old” rules – and can claim enough to justify the effort. If you’ve had any revenue drop at all compared to last year – in any month from July onwards -then you’re eligible to apply.
This is the case even if it’s just due to “normal” monthly fluctuations, or is not even remotely caused by COVID. If your revenue dropped, you’re eligible.
We really encourage you to look at this. Call us if you need to.
3) All those people working from home…
People who are required to have a home office (or cover certain other costs they incur relating to their job) have long been able to claim a part of the costs of their home as a tax deduction. Obviously, there are going to be many more people working from home this year.
The government’s confirmed that anybody who was sent to work from home during COVID will be able to claim a deduction. They’re currently asking for feedback on a simplified application form, that your employer will sign off.
Please don’t assume this will make a huge difference…. There are some limitations on what expenses you can claim, you can only claim for the number of months you were working from home, and based on the amount of your home you use for work. So, if you have about $20k a year of eligible costs, you worked from home for 3 months, and your home office occupied 10% of your home… then you’ll be able to claim a deduction of $500 [20k x 10% x 3/12] – worth perhaps $150 or so.
Better than nothing, we guess – but I’m not sure the tax saving will outweigh the cost of preparing the extra info on the tax return. I’ll reserve judgment until we see the details.
4) Starting to check up
We knew it was going to happen…. The government clearly signaled from March onwards that their goal was to get support in place as soon as they could…. and that they would come back round later to check for abuse, wrong claims.
“Later” is now. CRA has started to roll out audit programs. This will include reliance on more detailed year-end reporting from employers so that CRA can tell if you claimed CERB when you were also being paid by your employer.
We feel the government got their priorities right. And, since the programs had to be designed and rolled out so quickly, we support this audit process, to protect the generic “Canadian taxpayer”.
First indications are that genuine mistakes will not be punished (although you’ll still have to repay any money you received wrongly). However, there will be minimal tolerance for clear abuse.
If we’ve helped you with filings, we have your back. If we didn’t, but you’re still worried, please call us.
Thanks – and stay safe!