Government Financial Relief for Businesses

//Government Financial Relief for Businesses

Government Financial Relief for Businesses

Government Financial Relief for COVID-19 

The government wants to keep people working and help businesses through this time.

The information is changing almost daily. This is current as of April 10, 2020.

 

Businesses

Already in place

$40,000 Bank Loan

·         To be eligible, a business must have 2019 payroll of between $50,000 and $1,000,000.

·         Loan of $40,000 interest free until December 31, 2022

·         No penalty for early payment

·         If paid back by December 31, 2022, $10,000 is forgivable

·         If not paid back by December 31, 2022, it can be extended for 3 years at 5% interest per annum

·         Apply through your bank where you have your business bank account

·         Watch for information about this because the government could relax/extend the rules to qualify

 Business Development Bank of Canada

·         Are partnering with commercial banks for other loan needs

·         Apply through you bank

 Temporary 10% Wage Subsidy

·         Eligible employers are sole proprietorships, partnerships, CCPC’s (that qualify for the SBD), individuals, Not-For-Profits and registered charities

·         Must have an existing business number and payroll account with CRA on March 18, 2020

·         Passed into law in March 2020

·         Over the period March 18 to June 19

·         Pay employees as usual, deduct the amounts from your source deduction remittances the following months (or future amounts if the 10% is greater than the source deduction amount)

·         The subsidy is taxable income to your business

 

 Work-sharing Program

·         Available to year-round businesses who are not as busy due to COVID 19

·         Need to apply through Service Canada

·         All the employees must agree in writing

·         There are many rules/details and we have not had many requests for information from employers to date

 Tax Due Dates

·         Sole proprietors and partnerships personal taxes are due June 15 as normal, but don’t have to be paid until September 1

·         Corporations with year ends due after March 18 and before June 1, 2020 are extended to June 1. Corporate tax payments due between March 18 and September 1 are extended and due September1.

·         Source deductions need to be filed and paid on normal due dates

·         HST remittances should be filed on the normal due date. The government has made a statement that they can generally be deferred until June 30 without penalty. There is some concern among businesses that they will have to remit money they have not been able to collect.  There has been no further movement by the government yet.

 

Not Yet Passed

75% Wage Subsidy

·         We do not have all the details about how this will work because the government still needs to pass the legislation. Further guidance will be provided in the upcoming days.

·         If you have taken the 10% wage subsidy, you can only take another 65% (for a 75% total)

·         Available to qualified businesses that have a payroll account in place March 15.

·         In order to qualify. For March 15 to April 11, your revenues must have dropped 15% compared to either March 2019 or average of January and February 2020. For April 12 to May 9 and May 10 to June 6, it is a drop of 30% calculated the same way. (The same month in the prior year or January and February 2020 average.)

·         The subsidy is currently available for twelve weeks, from March 15 to June 6. It will be monitored to see whether the dates will be extended.

·         The maximum per employee is 75% up to a maximum benefit of $847 per week

·         Special rules apply for non-arm’s length employees. They cannot take raises during this period beyond what they have normally been paid

·         Employers will have to pay their employees the full amount and get reimbursed about 6 weeks later by the government

·         You will need to apply monthly through CRA’s My Business Account once the program is in place

·         We will share more information as it is provided 

 

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If you or someone you know has either accounting or bookkeeping needs. Feel free to give us a call at (705) 719-7778

 

2020-04-16T20:45:29+00:00