As a business owner, being audited by the CRA (Canada Revenue Agency) is one of the worst and most daunting experiences you will ever have. This revenue agency audits people or businesses if their tax returns appear suspicious or irregular.
The CRA is most likely to audit your business if you are a self-employed individual, manage a small business, or operate in an industry that involves large cash transactions. A CRA business audit is something you would never want to deal with.
Here, in this post, we will discuss four simple tips that will enable you to protect your business from a CRA business audit in Brampton or any other town. Continue reading to know more.
When you are running a small or large business, you need to remember that the tax department will compare your revenue in all your tax forms. You need to ensure there are no variations while presenting your income in every document you submit.
The tax department will compare the revenue amount you show in your income tax form with the revenue you present on your GST or your partner’s tax return. Make sure there are no discrepancies in the amounts presented.
If you declare a business income that is significantly higher and lower than your actual revenues, it draws the attention of the authorities which will eventually lead to a CRA Business Audit. The CRA has every bit of information they require to compare your profit margins and the revenues you earn from various industries.
Make sure your revenues appear normal for the kind of business that you run.
It is totally valid and appropriate to appoint your family members to manage your business. However, you must follow the rules while distributing income within your family. If you fail to follow the rules while appointing your family members, it will eventually invite a CRA business audit.
So, make sure to follow the standard rules while appointing your family members.
In corporate businesses, the CRA strictly observes any changes that exist in debit balances and shareholder loans. The presence of such changes may invite a business audit by the CRA. This agency also strictly watches over loans that you receive from a company and the personal expenses that you record as business costs.
So, you need to make sure there are no variations in shareholder loans as well as large balances.
CRA Business Audits are an unexpected and complicated process, and no business owner wants to deal with it. You can consider receiving proper guidance from expert accounting professionals who will educate you on following the CRA rules and avoiding any audits.
If you need any guidance, suggestion, or consultation on CRA business audit in Brampton, WEALTH CLOUD ACCOUNTING PROFESSIONAL CORPORATION is the name to trust. We are a team of highly qualified and experienced accounting professionals dedicated to offering a range of accounting services for reasonable charges. Get in touch to avail our support.