news brief Archives - Page 17 of 17

When the CRA’s bullying came back to bite it: Offshore tax audit results in $5 million in damages

The Canada Revenue Agency (CRA) was accused of being overly aggressive in it’s audit and assessment methods of SLT, but the agency itself had to pay up after an off shore audit went wrong and the taxpayers involved sued for damages. Shareholders of a company called SLT were relentlessly assessed over a period of several years only to have the CRA back off when the agency realized the assessments would not lead anywhere. The taxpayers sued and were awarded close to five million for lost interest and legal fees.

“The CRA’s conduct in this matter is troubling. More troubling are the facts that ordinary Canadians without deep pockets are often at the mercy of the CRA and that, had the case been governed by the laws of any other province or territory instead of Quebec civil law, the taxpayers might not have prevailed.”

This retirement advice should be retired

We’ve all been told how much to save for retirement. However, setting such a high goal, especially for those in their 20s or 30s, can leave many people so frustrated by what they’re told to save that they completely give up on savings and investing altogether. Although some guidelines should be followed, it should be reasonable as even saving a little will help. Around your mid-40s to early 50s is the time people should pay attention to saving guidelines to ensure you can retire with the lifestyle you want.

“Savings guidelines can help you see if you’re in good shape or need to save more. Ultimately, though, we need people to save consistently for retirement. “

Make robots pay taxes? Documents detail ideas to adapt to changing labour force – iPolitics.ca

Due to technology, the modern workforce is ever changing. Today in the “gig” economy, there is more part-time and short-term contract work, in addition to automation replacing human workers. These changes in the workforce would mean fewer taxes paid into the country’s federal finances. To counteract reduced revenues, the government is considering a proposal to place a tax on technology that is used to replace human workers, as well as other solutions such as a guaranteed minimum income for Canadians and rejigging labour rules to help workers.

“What the Liberals and other governments around the world are trying to respond to is increasing automation, the unbundling of work that can be done online by anyone, anywhere in the world, and more short-term jobs that are the hallmark of the “gig” economy.”

Personal Investor: 4 ways HELOCs can make life easier

Canada has a high number of people who have home equity lines of credit (HELOC). Frequently, these people only pay the interest on these loans each month, which has caused the average HELOC to grow to $70,000. For disciplined borrowers, a HELOC can be beneficial, for instance, to consolidate debt as well as set up an emergency fund. Additionally, people can use them to add value to their home by renovating or boosting their retirement savings plan contribution.

“With borrowing rates on the rise, HELOCs can be dangerous in the wrong hands. But for disciplined borrowers, they can be a lifeline when times are tough and a springboard to grow household wealth.”

Small businesses that embrace technology do better, says BDC

Although technology is used successfully by most large businesses, a recent poll of Canadian and American businesses has shown a high percentage of small businesses do not take advantage of available technologies for inventory to human resources to make them more successful. The biggest reason is that these businesses are worried about the start-up costs, but in reality, they are hurting themselves by not making the investment. Businesses that invest in technology are outperforming those that don’t use it.

“According to a new study from the Business Development Bank of Canada (BDC), small and medium-sized businesses in Canada are lagging behind when it comes to adopting technology, with only one in five having what the bank calls an ‘advanced digital profile.'”

New business taxes creating ‘a whole new group of losers’

One pain point for business are the changes to passive income rules. Some businesses are hit hard by the changes, because they have a huge income, or they were saving up to cope with certain business conditions. Now, they are paying more taxes, because their income is over the new threshold. For instance, some business’s franchise agreements require them to set aside some money for renovations every few years. Also many doctors use passive income to pay for clinic improvements. These businesses will now need to lay off staff and/or cut hours.

“Most of them have made no changes to their business practices, and I firmly believe that many of them will get a rude awakening once their tax file is passed by the CRA”

Look At The Numbers: There’s No Justifying A Tax Hike On Employers

Bill Morneau has proposed looking at small businesses for new tax revenue and has missed the boat on what it takes to be a business owner. The paper does not take into account the fact that many self-employed people are small-business owners with overhead that offsets tax breaks. Furthermore, employees reap benefits such as paid leave types and retirement programs that owners do not receive. Small businesses that are forced to pay a higher tax rate will eventually offset that cost through the consumer.