WSIB Audit results in $7000 assessment

[LarryTeeple]

This is a non-real estate topic which may be of interest to those of us who are self employed.

My sister was just audited by WSIB. She and her husband draw a salary from their contracting corp. The WSIB has assessed that her salary is to be included in the premiums due because she is not listed as a director, only a shareholder. Only directors can opt out of WSIB coverage. They went back only two years and assessed them almost $7000. Her lawyer, book keeper, and accountant did not know about this.

My wife and I operate exactly the same way, so I am having my wife listed as a director. We did not list her as a director originally to avoid the potential liability a director faces.

You may want to spread the word. Not many people are aware.

Thanks,

Larry

 

[EdRenkema]

QUOTE (LarryTeeple @ Jul 8 2009, 09:13 AM) They went back only two years and assessed them almost $7000.

Just another cash grab in a socialist economy where people are penalized for working hard and taking a risk on their own.

 

[RanjitPlaha]

Yes, I feel its another tax grab.
I have had a significant assessment made against our flooring company. It goes back 4 years and they want to assess even my independent contractors.
If you use sub trades make sure you get up to date WSIB clearance certificates or independent operator certificates (that are addressed to your company), otherwise YOU could become liable.
WSIB is even looking to make it mandatory for you to be covered even if your an independent operator with private coverage. That will affect the construction business even more.
Their thought is that it will prevent the underground economy, but its going to take more contractors and homeowners into the cash business because of rising costs.

Most bookkeepers and accountants do not know the intricacies of WSIB, as I have found out the hard way. Call WSIB without giving them your particular info and ask them questions, then call in again to confirm. I have found even they give different info because it depends on who you speak to.
If in doubt see if they can provide a wriiten explanation.

 

[Thomas Beyer]

While this may be a benefit .. consider to NOT list wife as director as there is liability attached to being a director, namely liability for
a) corporate tax in case of bankruptcy or non-payment
b) GST .. in case of bankruptcy or non-payment
c) fraud
d) employee taxes not paid .. in case of bankruptcy or non-payment

A director is personally liable for these .. a shareholder is not !!!

Thus, if you hold significant assets or a business in a corporation .. have the spouse as a shareholder BUT NOT as a director !!!

shareholders can receive dividends !

Consider various classes of shares .. for yourself, spouse, kids etc. ..

wifes (or husbands or uncles or friends or children) also can INVOICE for actual work performed at reasonable prices to increase expenses in the corporation (but of course must declare that as income and pay GST and PST on those services invoices) !