CRA payroll account update
What happens after you apply for a CRA payroll account? Maybe not what you'd think. My last blog discussed CRA program accounts, including payroll accounts. But a funny thing happened to this particular finance/operations consultant after registering for Clearview's payroll account.
When applying online, companies need to submit certain information with their payroll account application, like number of employees, date of first pay period, estimated gross payroll for the year, etc. What happens to that information?
As of now, this information does not follow your application to become part of your file with the CRA. What could happen as a result? When filing the payroll application for Clearview in the fall of 2017, I knew that we wouldn't have payroll until 2018. When we received the paperwork confirming the account was set up, the first filing deadline was listed as April 15/18 for the Jan/18-Mar/18 quarter. Since we had applied for quarterly remittance schedule, this was no problem. Right?
Wrong! Clearview received a call that we were late filing our Oct/17-Dec/17 payroll remittance. But the application stated that we wouldn't have payroll in 2017 and the paperwork didn't include a form for the last quarter of 2017!
After a payroll audit with a perfectly friendly CRA employee in Halifax, it was discovered that the information submitted with the application doesn't make it into a company's file, and therefore the payroll auditors don't have access to it. So until this is changed, this friendly payroll auditor needs to conduct payroll audits for companies that stated that their payroll account wasn't to become active until a later time.
In Clearview's case the audit was simple as I had all of the documentation to show that all withdrawals from the company's business bank account were not for payroll. But it still took some of my time and more time for the auditor. And what if this happened to a business that didn't have its records/bookkeeping current?
The lesson is: either wait to register for a payroll program account until you are ready to start payroll, or submit a nil filing for every period after you register and before you have any payroll transactions to remit against. Do what I say, don't do what I did!
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This blog is intended for information purposes only, and is not meant to replace the services of a bookkeeper or an accountant.