Payroll Tax Mistake Results in $12,000 Owing

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Payroll tax is the bane of every payroll administrator.

This week a client came to me because Canada Revenue Agency (CRA), says he didn’t pay his payroll tax in 2018.

$12,082.54 is the amount the client “owes” and yet the client says he paid everything!

The client set up a corporation to work for a Bay Street firm, on contract.The client is now hired on full time, but tax issues abound.

The Payroll Tax Problem

The crux of the problem here, is we have someone who is diligently and faithfully paying his payroll tax every month.

By all accounts, according to his accounting software, he paid $18,000 in payroll tax in 2018.

On the other hand, the tax man says he is a deadbeat.

I called the software company, who confirmed that all payroll deductions were indeed submitted to the CRA

The Tax Man Comes Calling

Then the tax man called me last Friday asking for $12,082.54 in payroll tax that was supposed to be paid.

I was told to get this paid by November 28, 2019 or the tax man will freeze the client’s bank account.

The tax man means business, see link for another client that had trouble with the tax man. https://youtu.be/I8M9U-sY2as

The Solution

The solution here is to submit proof of payment to the tax man asap.

To do this, I have to login to the client’s account and submit the documentation online.

A call to the CRA Business Enquiries Line today, Nov 14, 2019, proved to be helpful.

Agent Q informed me that a T4A slip, income tax of $12,082.54 was never paid.

Even though it was taken off the paycheque.

As I looked over her T4A slip, the amount of tax taken off was in error.

In fact, the submission of the T4A slip was a mistake, according to the client.

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James Bond 007 T4A Slip

As I went online as instructed by agent Q, I accessed the client’s account through the Represent a Client section.

At this point I saw the T4A slip and I was informed that I could amend this slip with a few clicks of a mouse.

After I consulted with the client about the deductions on his T4A slip, I was informed that the T4A was submitted in error, at which point I deleted the T4A slip.

https://accountingprofessionals.ca/I will call the CRA tomorrow and get an update for my client’s account. Stay tuned…

Read my other blog on the Top 3 Costly Mistakes Made with QuickBooks

For help with all your payroll challenges, including QuickBooks Online payroll call Mathew today 289-500-1978 or info@accountingprofessonals.ca