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Protecting the money you give to charity

July 21, 2010 By Leave a Comment

Most of the approximately 85,000 charities registered in Canada abide by the tax laws. When non-compliance is suspected based on public complaints or the information provided on annual information returns, the CRA undertakes an audit. Last year, 810 charities were selected for audit, and as a result, the CRA revoked the charitable status of 40 organizations for serious infractions of the law. Many additional charities also lost their charitable status for failure to file their annual return.

When charitable status is revoked, an organization can no longer issue official tax receipts for the donations it receives and is no longer a qualified donee under the Income Tax Act. The organization is no longer exempt from income tax, unless it qualifies as a non-profit organization, and it may be subject to a tax equal to the full value of its remaining assets.

The CRA publishes the names of charities that lose their charitable status on its Web site, so that potential donors are aware that the charities can no longer issue tax receipts. The notice of intent to revoke and other letters relating to the grounds for revocation are available to the public on request by calling 1-800-267-2384.

The CRA Charities Listings, available at www.cra.gc.ca/donors allows donors to search for any charity to view its annual information returns and verify that the charity they wish to donate to is registered. Visitors to the site can also find information on how the CRA regulates charities and tips for donating wisely.

Ontario and British Columbia: Transition to the Harmonized Sales Tax

July 21, 2010 By Leave a Comment

The Government of Ontario and the Government of British Columbia are each introducing a harmonized sales tax (HST) that will come into effect on July 1, 2010.

The HST rate in Ontario will be 13% of which 5% will represent the federal part and 8% the provincial part.

The HST rate in British Columbia will be 12% of which 5% will represent the federal part and 7% the provincial part.

For more information, please refer to the information sheet issued by Canada Revenue Agency about

“Transition to the Harmonized Sales Tax – Continuous Supplies and Budget Payment Arrangements” and

“harmonized Sales Tax: Purchasers of New housing in Ontario“.

A proud sponsor of the Jim Stonehouse Memorial Golf Tournament

July 21, 2010 By Leave a Comment

Padgett Business Services was once again a proud sponsor of the 4rd annual Jim Stonehouse Memorial Golf Tournament benefitting the Ottawa Regional Cancer Foundation (ORCF) held on Monday July 5, 2010. Jim was a great man who loved his family, his friends and the game of golf. A resident of Kanata, Jim gave of himself freely through his involvement with various charitable organizations in the community, always selflessly and in an effort to support the common good.

We are extremely proud of the relationships we have with our customers. By participating in this and other charity events, we hope to show our community involvement and gratitude to our customers.

For more information on the tournament and how you can register next year, visit Jim Stonehouse Memorial Golf Tournament

Simplified logbook for motor vehicle expense

July 21, 2010 By Leave a Comment

Did you know that a new simplified logbook for motor vehicle expense was introduced by the government to small business owners. This new sample logbook will simplify record keeping, significantly reduce paperwork and still provide reliable data to both business owners and the CRA.

In the 2008 Federal Budget, the Government of Canada, through recommendations by the CFIB, identified the requirement to keep a logbook as the most burdensome aspect of the motor vehicle tax provisions for its members. In response, the Canada Revenue Agency developed an alternative system for recording business travel with the aim to assist businesses in substantiating the business use of a motor vehicle that was used for business and personal reasons.

Businesses can choose to maintain a full logbook for one complete year to establish the business use of a vehicle in a base year. After one complete year of keeping a logbook (starting in 2009 or thereafter) to establish a base year, a three month sample logbook can be used to extrapolate business use for the entire year, providing the usage is within the same range (within 10%) of the results of the base year. Businesses will need to demonstrate that the use of the vehicle in the base year remains representative of its normal use. Thus, for both income tax and GST/HST purposes, the motor vehicle record keeping burden is being reduced.

For more information about the sample logbook policy, go to http://www.cra.gc.ca.

Canada Pension Plan Basics

July 21, 2010 By Leave a Comment

The Canada Pension Plan (CPP) is a contributory, earnings-related social insurance program. It ensures a measure of protection to a contributor and his or her family caused by the loss of income due to retirement, disability and death.

There are three types of CPP benefits:

  • Disability benefits (which include benefirts for disabled contributors and for their dependent children);
  • Retirement pension;
  • Survivor benefits (which include the death benefit, the survivor’s pension and the children’s benefit).

The CPP operates across Canada, although the province of Quebec has its own similar program, the Quebec Pension Plan (QPP). The CPP and the QPP work together to ensure that all contributors are protected. With very few exceptions, every person in Canada over the age of 18 who earns a salary or a wage must pay into the CPP. You and your employer each pay 50% of the contributions. However, if you are self-employed you pay both portions.

You do not make contributions if you are receiving a CPP disability or retirement pension. At age 70, you stop contributing even if you are still working.

Employment Insurance Benefits for Self-Employed People

July 21, 2010 By Leave a Comment

Beginning in January 2011, self-employed Canadians will be able to voluntarily access Employment Insurance (EI) special benefits. There are four types of EI special benefits:

  • Maternity benefits (15 weeks maximum) available to birth mothers. It covers the periods surrounding birth. A claim can be submitted up to 8 weeks before the expected date of birth;
  • Parental / adoptive benefits (35 weeks maximum) available to adoptive or biological parents while they are caring for a newly adopted or newborn child. It may be taken by either parent or shared between them;
  • Sickness benefits (15 weeks maximum) which may be paid to a person who cannot work because of injury, sickness, or quarantine; and
  • Compassionate care benefits (6 weeks maximum), that may be paid to persons who have to be away from work temporarily to provide support or care to a family member who is gravely ill with a significant risk of death.

You may be eligible to access the EI special benefits beginning in January 2011 if you:

  • Are a self-employed person; and
  • Are a Canadian citizen or a permanent resident of Canada; and
  • Have voluntarily entered into an agreement with the Canada Employment Insurance Commission through Service Canada.

Self-employed Canadians will be required to voluntary opt into the Program at least one year prior to claiming benefits. They will make premium payments beginning in the tax year in which they enrolled in the EI Program. The program had a start date of January 1, 2010.  Claims could be made beginning January 1, 2011.

Self-employed individuals need to have earned a minimum of $6,000 in self-employed earnings during the previous year to access the EI special benefits.

Self-employed persons can opt out of the EI Program at the end of any tax year, provided they have never claimed any benefits. If a claim for benefits was made they have to continue to contribute to the EI Program on their self-employed earnings for as long as they are self-employed.

Self-employed Canadians that opt into the EI Program will pay the same EI premium as salaried employees (maximum of $747 in 2010). She or he will not be required to pay the employer’s portion of the EI premiums.

Self-employed residents of Quebec continue to receive maternity and paternal payments under the Quebec Parental Insurance Program. Self-employed Quebec residents could also choose to apply for the federal program mentioned above.

The CRA answers questions on the HST

July 21, 2010 By Leave a Comment

The answers to dozens of questions about the implications of the HST for Public Service Bodies (PSBs) are available from the Canada Revenue Agency (CRA).

As Ontario and British Columbia move towards implementing the HST on July 1, 2010, PSBs – including non-profit organizations, charities, municipalities, school and hospital authorities, public colleges and universities – may have questions concerning HST rebates or other rules or requirements resulting from the new tax.

To answer these questions, the CRA has developed the following publication: Harmonized Sales Tax for Ontario and British Columbia – Questions and Answers for Public Service Bodies. To view the publication go to: http://www.cra.gc.ca/HST publication/

For more information about the implementation of the HST, go to www.cra.gc.ca/harmonization.

Interest rates for the third calendar quarter

June 29, 2010 By Leave a Comment

The Canada Revenue Agency (CRA)  announced the prescribed annual interest rates that will apply to any amounts owed to the CRA and to amounts the CRA owes to individuals and corporations. These rates are calculated quarterly according to applicable legislation. The rate indicated below will be in effect from July 1, 2010 to September 30, 2010.

Income tax

* The interest rate charged on overdue taxes, Canada Pension Plan contributions, and Employment Insurance premiums will be 5%.

* The interest rate paid to corporate taxpayers on overpayments will be 1%.

* The interest rate paid to non corporate taxpayers will be 3%.

* The interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans will be 1%.

Other taxes

The interest rate on overdue and overpaid remittances for the following taxes will be:

Tax and Duty Overdue remittances Overpaid remittances
  Corporate taxpayers Non corporate taxpayers
Goods and Services Tax (GST) 5% 1% 3%
Harmonized Sales Tax 5% 1% 3%
Air Travellers Security Charge 5% 1% 3%
Excise Tax (non GST) 5% 1% 3%
Excise Duty (except Brewer Licensees) 5% 1% 3%
Excise Duty (Brewer Licensees) 3% N/A N/A
Softwood Lumber Products Export Charge 5% 1% 3%


For information on the prescribed interest rates of other calendar quarters, go to the www.cra.gc.ca/interestrates Web page.

Payroll Deductions Tables

June 15, 2010 By Leave a Comment

Did you know that effective July 1, 2010, there are changes for Newfoundland and Labrador and Nova Scotia. The new Payroll Deductions Tables (T4032) and new Payroll Deductions Supplementary Tables (T4008) effective July 1, 2010 are now available on the CRA Web site:

T4032 Payroll Deductions Tables

T4008 Payroll Deductions Supplementary Tables

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