Operating a business during the Coronavirus (COVID-19) pandemic is a challenge.  It can be a complex decision about having employees return or being open to the public.  There are national and local guidelines and regulations to ensure the safety of all concerned. 

There are other issues to be considered that will impact your business financially, including lower revenues from customers avoiding your premises and fewer trained employees to serve.  You may also incur higher costs for sanitation and personal protective equipment. 

Tax Planning

Consider a loan at a prescribed rate that will split investment income with a family member.  With the move to lower interest rates by the central bank, you can possibly lock in a significantly beneficial interest rate. 

Check with your accountant about any passive investments and see if the passive income tax rules will apply.

Keep careful records of all office expenses, including those for home office operations for you and your employees.  The CRT will probably have some guidelines when it comes time to file the 2020 return and you want to have all the back up materials at hand. 

On a personal note, it is important to have all Wills, healthcare agreements, powers of attorney, etc. reviewed and updated as necessary. 

Federal Support

The Business Credit Availability Program (BCAP) is offering support through credit.  The Canada Emergency Business Account is allowing for bank loans up to $40,000 for small businesses.  These are interest free for the first year and up to $10,00 can be waived for repayment.  There are conditions and restrictions. 

Look into any municipal support available.  This could include deferrals of utilities or taxes.  Check into any credits or incentives even if you haven’t taken advantage of them previously.

Work Share

The work sharing program was extended to 76 weeks from its original 38.  This can be an advantage to employers who opted to reduce hours rather than lay off staff.

Supplemental Unemployment

A supplementary unemployment benefit plan helps with the wages of employees during unemployment, temporary or indefinite.

Employment Insurance (EI)

There are special benefits designed for the self employed as well as a temporary wage subsidy for small businesses that have employees.  Many of these small operations have closed and some are not sure if they will resume after the pandemic recedes.

Temporary Wage Subsidy

This is a program that will cover up to 75% of employees’ wages.  Check to see if your company is eligible and what it will take to use this benefit.

Prepare for a Setback

Even with phased openings, there is the possibility of a recurrence of the virus.  When this started in the spring it was reactionary.  Now you have the opportunity to plan should you need to evacuate a second time. 

Your accountant is available for consultation on a variety of financial issues.  Use this important resource for your small business or self employment.  They will be keeping tabs on the availability of subsidies and government programs.  They are also the experts who will be watching what the CRA will be allowing as deductions for next year’s tax return.

If you're looking for an accountant in Brampton or Mississauga, Contact our team at CapexCPA today for more information. Click on the link below to book a meeting.

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- The Capex Team