October 2020
October 20/20
The speech from the throne indicated that the Canada Emergency Wage Subsidy (CEWS) will be continued through to the summer of 2021. This is a clear indication that the federal government believes that COVID-19 will still be affecting the economy and the health of Canadians for another year. Details will emerge over time, right now we know the system in effect until the end of 2020.
When you are working on your 2021 business plan, you would be able to assume that the wage subsidy will still be available to you if your revenue is still being affected.
October 13/20
We now know that the preparation of 2020 T4’s is going to be more complicated because CRA is going to use the T4 to monitor compliance with CERB rules. Every employer in Canada is going to have to report, for every employee, the amount earned by that employee in each of the CERB time periods as follows:
For the tax year 2020, in addition to reporting employment income in Box 14 or Code 71, use new other information codes when reporting employment income and retroactive payments in the following periods:
Once the T4’s are filed by employers they will have all the information they need to figure out if someone was receiving income while they were on CERB. Anyone in this situation would be wise to contact CRA now and start making arrangements to repay the CERB. Better to admit your mistake now than to wait to be caught, with the potential for penalties.
For employers and their accountants, this is going to be a lot more work. The only good news is that you can figure out the payments in the CERB periods now, if you want to get some of this done before February.
October 6/20
The continuing news about the COVID-19 pandemic is very difficult to interpret. We have at least two problems.
How do we plan in the face of so much uncertainty? We are missing the illusion of control. We used to think that we could plan, that we could make a budget for the year and measure our performance against the budget. We could never predict the future, but we used to think that we could and now that illusion is gone.
Let me ask you this – do you believe that there is a second pandemic wave coming that will likely close our businesses down again? If so, where did you put that in your 2020/2021 budget? Have you planned for how your business will survive another closure?
As business owners we are in charge of our own risk management, so what is the plan? Maybe there will not be a second wave, but it never hurts to plan.
Copyright © 2024 Painless Financial Training Group Inc. - All Rights Reserved.