By CRM Staff
Peterborough, Ontario -- September 13, 2017 -- Changes may be coming to federal business taxes, and Collision Repair magazine wants to know what you think about them. In brief, Federal Finance Minister Bill Morneau has proposed three changes to taxation that will impact small businesses. You can participate in our survey regarding the proposed changes at this link.
The change that seems most likely to impact on collision repair shops is the proposed curtailment of "income sprinkling," a method by which business owners shift a portion of income to family members, either through salary or dividends. Morneau has stated that he plans to impose a "reasonableness" test so this does not punish legitimate family businesses. In theory, the test will determine just how much work a family member actually does at a business, and if they can really lay claim to profits. Official estimates from Finance Canada say that approximately 50,000 Canadian families will be affected by this change.
Will changes to this practice impact your business? Fill out our latest survey at this link and let us know. You can also contact our Editor, Mike Davey, directly at 905-549-0454 with any comments on how the proposed changes will impact you and your shop.
Kelvin Campbell is the Owner/Operator of CSN Chapman Auto Body in Halifax, Nova Scotia. In a recent interview with Collision Repair magazine, Campbell said that he believes this an issue all bodyshop owners should address with their Members of Parliament.
“I think this is one of the most important issues to face small business in quite some time,” he said. “Given the fast pace of which this industry is changing, this will have a dramatic effect on our ability to invest in our businesses.”
Currently, the federal government is in the midst of a 75-day consultation period to allow people to provide feedback that may lead to adjustments in the proposed changes. The consultation period officially closes on October 2, 2017.
The proposed changes also include curbing of "passive investment income," which the government describes as the investment of money left in a corporation, for purposes other than to invest directly in growth, and the conversion of a corporation's regular income into capital gains, which typically attract a lower tax rate.
The survey is open to all members of the collision repair industry. You can participate in that survey at this link.