Ottawa businesses, served remotely
Accountant for Ottawa businesses
Ottawa accountant for government contractors and consultants: personal services business risk reviewed, Ontario HST and the T2 from $2,500.
Prepared by HBT Accounting, a CPA led firm in CalgaryUpdated 5.0 on Google, 59 reviews
Where one client can change how you are taxed
An incorporated consultant working on contract in Ottawa, including for government, faces a specific tax exposure. Where the owner would reasonably be an employee of the client if the corporation did not exist, the CRA can treat it as a personal services business, which removes the small business deduction and sharply narrows what can be deducted.
It is a costly thing to get wrong, and it is decided by the real working relationship rather than the wording of a contract. HBT reviews that honestly before the structure is set, and keeps the records that support the position taken.
What an Ottawa engagement covers
The contractor question first
An honest review of whether the corporation stands up as an independent business.
Ontario HST
Registration and returns at 13 percent, including work billed to federal departments.
Corporate year end
The T2 and supporting schedules, with compensation reviewed before the year closes.
How the work begins
Step 1: Describe the contracts
How many clients, who directs the work, who supplies the tools.
Step 2: A straight assessment
What the facts support, said plainly, with the consequences spelled out.
Step 3: Documented and filed
Records kept to support the position, and the return filed on time.
Is an Ottawa consultant at risk of personal services business rules?
Possibly. Where an incorporated consultant works for one client, is directed by that client and lacks the usual marks of an independent business, the CRA may treat the corporation as a personal services business. That removes the small business deduction and restricts deductions to a narrow list. The test looks at how the work actually happens, so it is worth reviewing before the structure is set rather than after a review letter arrives.
Official sources
Corporate year end and T2 from $2,500+. Corporate tax planning from $350/hr. Amounts are starting prices plus GST or HST where it applies. Final fees depend on scope, and we quote a fixed fee once the work is clear. See starting fees. The first conversation is free and takes about 10 to 15 minutes.