Expanding Your Business? Learn About New Tax Requirements
As you grow your business during its life cycle, it will trigger new tax requirements. Here’s a quick look at what to consider as it evolves.
The shift to a corporation
The first step towards expanding a partnership or sole proprietorship is moving to a corporation. Incorporating a business helps protect your assets and build credit. Luckily, Canada Revenue Agency’s webpage contains all the information regarding tax registration changes. It will also help to consult a lawyer and accountant before shifting to a corporation. Doing this will help you navigate the more in-depth record keeping requirements of a corporation.
The challenge of having new hires
A growing business will require new employees to keep up with everyday operations. The CRA webpage contains information on all issues about employee payroll and tax issues. Ensure you take advantage of government tax incentives such as Employer Training Tax Credits. What if you are hiring employees for the first time? Well, refer to the page on Life Events for employees.
Diversifying to new divisions or locations
What happens when you start expanding to new divisions or locations? For starters, you don’t need a new business number for every locale. The ‘How it works’ page on CRA’S webpage contains all details on new account registration for an existing business number. However, it will help to learn about the special filing rules for adding secondary branches or divisions. Ensure you visit the CRA Employers’ Guide under Summary, Filing the T4 slip, and General Information for HST/GST for guidance.
Conducting experimental research and development
A growing business has to keep up with the needs of its customers. Therefore, you have to invest in the research and development of your product or services. Luckily, you can always take advantage of the Scientific Research and Experimental Development (SR&ED) tax credit — offered by the British Columbia government and/or the federal government.
Exportation and importation of goods & services
You need to register a new account under your current business number to start exporting or importing goods and services. You can always apply for a business number if you don’t have one already. However, you cannot have an import/export account without having a valid business number.
Take away tax complexities for your growing business
Having confidence in your numbers while remaining compliant as you grow your business can be rather tricky. However, E&E Ltd is here to help with all your accounting and tax planning needs. If you’re looking for an experienced accounting partner who will help take your business to the next level, contact us for more information. Visit our blog for more articles, news and updates about small business accounting, tax planning, CRA audits and bookkeeping.
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