Confirmed:  The CCR for Small Business is Tax Free

Ottawa has confirmed that the CCR for Small Business received by eligible Canadian-controlled private corporations (CCPCs) will be tax free for the 2019-20 to 2023-24 fuel charge years, as will the final payment for the 2024-2025 fuel charge year.  Draft legislation was released on June 30, 2025 with this announcement; and will be introduced for law making in Parliament this Fall.   Some of the more significant details are discussed below.

As with other employees, drivers must meet all the following criteria in order to claim travel expenses: They must be normally required to work away from your employerís place of business or in different places. Under their contract of employment, they must be required to pay their own travelling expenses. They must not receive a non-taxable allowance for travelling expenses. They must have a copy of Form T2200, Declaration of Conditions of Employment, completed and signed by their employer. In addition, in order to claim food and beverage expenses they must be away for at least 12 consecutive hours from the municipality and the metropolitan area where they normally report for work (home terminal). Generally the claim for food and beverage expenses is limited to 50% of the actual amount spent. Claiming Using the Simplified Method Drivers who work for employers who are in the business of transporting goods or passengere may use form TL2 Claim for Meals and Lodging Expenses and my use the simplified method for calculating their food and beverage expenses. Employees whose main job function is the transport of goods or passengers may also claim using the simplified method even if their employer is not in the business of transporting goods or passengers, so long as they meet the criteria listed above. Under the simplified method, employees are not required to claim their actual expenses but may, instead, claim a fixed amount per meal. For 2007, the fixed amount was $17 per meal. The employee is still required to keep a log book which details the travel and meals purchased. Alternatively, the employee may claim for the actual amount spent (detailed method) if they maintain the receipts for meals to back up their claim. Under either the simplified or detailed method, there are limits on the maximum numbers of meals that may be claimed. CRA will allow a claim for one meal after every four hours starting at the time of departure. A maximum of three meals per 24-hour period (again starting at departure time) may be claimed. Where the employee is normally required to be away from his or her home terminal but is sometimes scheduled for a trip lasting 10 hours or less, the maximum claim allowed is for one meal. Employees regularly scheduled on trips lasting 10 hours or less do not meet the criteria listed above for claiming meals. Alternatively, members of work crews, who purchase groceries and prepare their own meals (either individually or as a crew) may claim using the batching method, which allows a maximum claim of $34 per day. With the exception of long-haul drivers (see below), the calculated claim for meals (under any of the three methods) is multiplied by 50% to calculate the allowable deduction. Special Rules for Long-haul Truck Drivers A long-haul truck driver is an employee whose main duty of employment is the transportation of goods by way of driving a long-haul truck. A long-haul truck is a truck or tractor that is designed for, and primarily used for, hauling freight, and has a gross vehicle weight rating of more than 11,788 kg. For trips after March 18, 2007, long-haul drivers on eligible runs are allowed to deduct 60% of their meal expenses (rather than the 50% limit for other claims). An eligible run for this claim is a trip of at least 160 km from the home terminal and that requires the driver to be away from the home terminal for at least 24 hours. Thus, a long-haul truck driver that is scheduled on a shorter run is not allowed the additional 10% claim. The 60% limitation will be raised by 5% each year until 2011 when it will be capped at 80%.

The Canada Revenue Agency has announced the prescribed annual interest rates that will apply to any amounts owed to the CRA and to any amounts the CRA owes to individuals and corporations. These rates are calculated quarterly in accordance with applicable legislation and will be in effect from July1, 2008, to September 30, 2008. Income tax The interest rate charged on overdue taxes, Canada Pension Plan contributions, and Employment Insurance Premiums will be 7%. The interest rate paid on overpayments will be 5%. The interest rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans will be 3%. Each of these rates represents a 1% drop from the rates in effect for the last two quarters. Other taxes The interest rate on overdue and overpaid remittances for the following taxes will be: Tax and Duty Overdue remittances Overpaid remittances GST 7% 5% HST 7% 5% Air Travellers Security Charge 7% 5% Excise Tax (non GST) 7% 5% Excise Duty (except Brewer Licensees) 7% 5% Excise Duty (Brewer Licensees) 5% N/A Softwood Lumber Products Export Charge 7% 5%  

Canada Pension Plan (CPP) The Canada Pension Plan is a mandatory contributory, earnings-related social insurance program. It provides some protection to contributors and their families against the loss of income due to retirement, disability and death by providing a pension. CPP must be deducted from an employee's earnings if that employee: is 18 years or older, but younger than 70, is in pensionable employment during the year, and does not receive a CPP retirement or disability pension. Each employer is also required to contribute the same amount of CPP that is deducted from their employees pay. Most, but not all, earnings are pensionable. Some examples of earnings not subject to CPP contributions would include: pension payments, death benefits and payments made after an employee dies, except for amounts the employee earned and was owed before the date of death. Employment Insurance (EI) Employment Insurance is a social program that provides assistance to workers who lose their jobs. It also provides maternity, parental, and sickness benefits for employees who are unable to work temporarily. Participation is mandatory for all employees who qualify and for their employers. Like CPP, most earnings are subject to EI deductions ñ these are known as insurable earnings. Employers are required to contribute at a rate of 140% of the employee contribution to employment insurance.  That is, for each $1.00 that is deducted from the employee's paycheque for EI premiums, the employer must remit $2.40. There is one very important area to be aware of here though. Earnings of an employee whose conditions of employment are not those of an ìarms lengthî employee are not insurable. It is always a question of fact as to whether an employee's conditions of employment meet this test. Generally, the issue is only important whenever the employee is related to the employer in some way. Related persons are individuals connected by blood relationship, marriage, common-law relationship, or adoption. Where the employer is a corporation, the employee will be related to the corporation when the employee is related to a person who either controls the corporation or is a member of a related group that controls the corporation. If such an employee enjoys employment conditions that an arm's length employee would not ñ unreasonably high or low pay, irregular working hours, no formal responsibilities, etc. ñ the employment is not insurable.  In addition, the employment of a person who is employed by a corporation and who controls more than 40% of the voting shares is not insurable. Excerpted from Advanced Payroll for Professional Bookkeepers, one of the courses that comprise the DFA, Certified Bookkeeping Specialist designation program.

Last week, the CRA released the 2008 tax filing statistics as of May 28, 2008. The trend towards electronic filing continues although fewer taxpayers opted to use the TELEFILE system in 2008 as shown in the following table. 2008 2007 Change Total received 23,687,417 23,099,964 +2.5% NETFILE 4,150,737 3,957,938 +4.9% TELEFILE 478,023 505,966 -5.5% EFILE 9,014,295 8,259,416 +9.1% Paper 10,044,362 10,376,644 -3.2%

Last week, the CRA released figures for the average tax refund for the 2007 tax season. They touted the government's tax relief measures as the reason for the significant increase in refunds. But what do these large refunds mean for the average Canadian? It means that, on average, the government is withholding over $100 too much from the taxpayer's income each month. While some taxpayers consider this to be a form of forced savings (you don't miss what you don't see), is this really the best use of their money? Other potential (more beneficial) uses might be: If the taxpayer has credit card debt, pay down that debt by $100 every month (interest savings @19% interest: $104 in the first year); If the taxpayer has a mortgage, increase the monthly mortgage payment by $100 (potential savings on a $100,000 mortgage for 25 years @ 7%: $33,211 - plus the mortgage is paid off 6 1/2 years earlier); Deposit $100/month into an RRSP (potential accumulation over 20 years @9% income is over $64,000, not to mention the tax refunds generated by the RRSP deposits); If the taxpayer has no debt, and has maxed out RRSP contributions, invest the money at 4% interest (potential interest $26/year - less tax on the income of about $10, depending on the taxpayer's income level). The key is to get the employer to withhold less income tax from each paycheque. There are basic techniques that employees need to use to allow the employer to withhold less. Make sure that the TD1 Personal Tax Credits Return form is completed properly. All amounts to which the taxpayer is entitled should be claimed. If the taxpayer has any of the following deductions or credits, which are not accounted for on the TD1 form, then Form T1213 Request to Reduce Tax Deductions at Source should be completed and submitted to the employer. RRSP contributions Deductible Support Payments Employment Expenses Carrying Charges Charitable Donations Rental Losses Taxpayers should always remember this: a refund is not a good thing! Let us know how your clients feel about getting a tax refund - vote in our poll question below.

Andrew Brash, Knowledge Bureau Faculty made it to the summit of Mt. Everest last week, fulfilling a dream that was interrupted in 2006 when he saved a fellow mountain climber from certain death, thereby sacrificing his own ambition to make it to the top. We congratulate this true Canadian hero! So much of this climb was out of Andrew's control, from having to climb on the Nepal side, to waiting out the Olympic flame's controversial trip to the top. However, when it came down to it, Andrew said he would reach the summit of Mt. Everest on May 22 or 23. And he did. He and a small group, climbed through the night to arrive at the top of the world at 7am May 23! "It was a more difficult climb than I realized it would be and climbing all night borders on desperate (we left camp at 9 pm). The summit was cold and windy, as was most of the climb Ö" says Andrew. Since then, Andrew and his team began the descent with the eye on returning to family and friends back home. As of May 26, they have returned to and packed up base camp, then began the hike back toward the world they left two months ago. Andrew concludes this remarkable journey with his heroic act of compassion and humanity to flame his ultimate, triumphant achievement! Hear his adventures first hand! Book Andrew as a keynote speaker to hear his triumphs first hand. Contact The Knowledge Bureau now: 1-866-953-4769. The Knowledge Bureau was a proud sponsor of Andrew's successful return to Mt. Everest. You can review all his online entries for the whole 2008 Mt Everest experienced by visiting his website andrewbrash.com.