Disruption of Vancity banking services

Vancity business and personal account holders will experience significant service disruptions beginning 5pm on November 9, 2016 and continuing until mid-day on November 14, 2016.
It appears that you will not be able to:
– use online, mobile or telephone banking services,
– do any in branch transactions including sending or receiving wire transfers,
– make bill payments including CRA remittances,
– transfer funds using interac etransfers.
Business accounts linked with QuickBooks Online will need to be relinked with the software as all accounts will have new account numbers.  Please edit the sign in information in QuickBooks Online with the new account number when it has been assigned.
Vancity has or will be mailing a “banking system upgrade business guidebook” to its business clients.  This guidebook provides more information on the services effected.  For more information please visit Vancity’s website or your local branch.

Restricting Multiplication of the small business limit

2016 Federal budget announced measures to reduce a Canadian controlled private corporation’s accessibility to the small business limit by restricting multiplication of the small business limit. The announcement introduced the term specified corporate income (SCI) – defined as income earned through the provision of services or property to another corporation where there is common ownership.

Let’s say that there are two unassociated corporations: OpCo and ServiceCo. OpCo pays ServiceCo a management fee for management services provided.

Previously OpCo and ServiceCo were each entitled to claim the $500,000 small business limit and, consequently, each corporation would pay 13% tax in British Columbia (federal and provincial combined) on its first $500,000 of qualifying income.

Effective for taxation years beginning on or after March 22, 2016, if there is common ownership between OpCo and ServiceCo, then SerivceCo cannot claim the small business limit on the active business income earned from OpCo unless OpCo assigns a portion of its unused small business limit to ServiceCo. This assignment is done by completing “a special form” – which has not yet been released.

Common ownership exists when ownership interest in Opco is held by:

  • ServiceCo;
  • any shareholder of ServiceCo.
  • any person who does not deal at arm’s length with any shareholders of Service Co.

However, if 90% or more of ServiceCo’s active business income is earned from providing services to arm’s length persons other than OpCo, then these SCI rules do not apply.

If Opco does not assign any of its small business limit to ServiceCo, ServiceCo will pay tax 26% tax – rather than 13% tax – in British Columbia (federal and provincial tax combined).

As at the date of the post, this 2016 Federal budget initiative had not yet received Royal Assent.

September 15, 2016 B.C. minimum wage increase

The minimum wage in British Columbia increased today as follows:

General: $10.85 per hour

Liquor server: $9.60 per hour

Live-in home support worker: $108.50 per day or part day worked

For information on other the rate increases please refer to the Province’s minimum wage factsheet.

Beware of scammers posing as CRA employees

Over the past year a few of our clients have called to say they have received either a threatening telephone call from a person claiming to work for the Canada Revenue Agency who was demanding payment for a tax debt or an email from the Canada Revenue Agency requesting their banking information to facilitate the deposit of their tax refund.  In all of these instances we concluded that the communication was a scam.

If you are questioning the validity of any communication received from the Canada Revenue Agency, whether it be regarding a tax debt or refund, we recommend that you review your account online through My Account or My Business Accounts.  If you have not yet set up an online account with the Canada Revenue Agency you can also call Personal Income Tax Inquiries at 1-800-959-8281 or Business Inquiries at 1-800-959-5525.

The Canada Revenue Agency is well aware of these and other communication scams.  Please visit the Canada Revenue Agency’s webpage that discusses these scams.  We recommend that you take a few minutes and watch the Canada Revenue Agency’s video on this topic.

Money Coaches Canada event: “55 and Up! Embrace the Future”

The amazing people at Money Coaches Canada are hosting the following event:

55 and Up! Embracing the Future

When: October 2, 2016 8:30am to 5:00pm
Where: YWCA, 535 Hornby St. Vancouver, BC

Rev up your health, your money, your relationships, your confidence, your style and even your love life! Learn how to ride the roller coaster of change with courage and confidence. A great event. And one we are very proud to support. Our own Karin Mizgala will help participants gain skills and confidence to handle their finances for a comfortable future.

For more information on this event and to register please visit Money Coaches Canada’s website.