Tax Arrears Cleanup and Filing
By now, as a Small Business Owner you are way into your spring cleanup plans from filing and paper work to updating computer system to changing office furniture. But while you are doing that, have you giving some thought to outstanding tax filing of prior years?
This will need cleanup also. Why not put the breaks on and attend to those more critical issues first? Outstanding taxes filing could cause you and your company much headache in the form of interest and penalty.
Interest and Penalties:
Interest: If there is a balance owing for 2018 tax return and it was not paid by April 30, 2019, CRA will charge compound daily interest starting May 1, 2019.
If you have amounts owing from previous years, CRA will continue to charge compound daily interest on those amounts. Payments you make are first applied to amounts owing from previous years.
Late Filing Penalty: The penalty is 5% of your 2018 balance owing, plus 1% of your balance owing for each full month that your return is late, to a maximum of 12 months. If CRA charged you a late-filing penalty on your return for 2015, 2016, or 2017 your late-filing penalty for 2018 will be 10% of your 2008 balance owing, plus 2% of your 2018 balance owing for each full month that your return is late, to a maximum of 20 months. This information can also be found on the CRA (Canada Revenue Agency) website.
If you happened to file your return late for reason beyond your control. You might be able to get interest and penalties waived or reduced under the taxpayer relief provision.