Avoiding the Canada Revenue Agency might cost you
Have you ever had to sell your personal assets to pay your business bills? Now that's a statement that sounds painful.
Avoidance is always painful. At first, it seems like a no-stress option. You divert the pressure and it's okay for the short term. So you think. Until the stress of it all takes over.
This is what can happen when escape is your primary strategy. Here's a real-life example.
A person's been in business for four years, has employees, is working hard, has been paying the employees, and has been growing the business. Everything is going fine, except that this entrepreneur forgot in the beginning to pay the payroll remittances.
Just didn't do it. Did not want to deal with the paperwork. Not doing it one month turned into not doing it for the quarter, which turned into not doing it for the year, which turned into not doing it for several years. The person was withholding taxes and keeping them.
What's wrong with this picture? The entrepreneur has accumulated hundreds of thousands that don't belong to them. It's the type of debt where the responsibility is solely on the entrepreneur. When you pay your employees, you must deduct their taxes and then remit them to the Canada Revenue Agency.
The entrepreneur knew it was a mistake.
"I will think about that tomorrow" says Scarlett O'Hara from Gone With The Wind.
Finally comes the time when the issue needs to be resolved! Started remitting everything to the government. In response, "We thank you very much; however, there are penalties and interest for not making your commitments. This is how much it's going to cost you."
In the end, the business owner had to sell a personal residence to pay the debt to the Canada Revenue Agency.
What is the point of the story? If you have an issue and you know it's important, burying your head in the sand will not make it go away. It resurfaces. It was painful.
Aske for help when you are not sure. That is what professionals are for. Deal with it now, not years later.