Accountant for incorporated Ottawa consultants

One-owner Ottawa clients: bookkeeping, payroll and the T2 from $500 to $700 a month. Filings include T4 slips.

Consultants billing a small number of clients should also read how we handle incorporated professionals generally, and, if your work is closer to agency delivery, accounting for creative and marketing agencies.

The agency and consulting accounting hub gathers the revenue-recognition, classification and sales tax material that applies to any professional-services firm.

Why the Ottawa contract market concentrates risk

Long engagements with one department or prime contractor are normal here, and they raise personal services business risk. The test asks whether, without the corporation, you would reasonably be regarded as an employee of that client, weighing control, tools and workspace, profit or loss, substitution and integration.

Two more conditions: you or a related person hold at least 10% as a specified shareholder, and the corporation has no more than five full-time employees. A one-person Ottawa consultancy meets both. See our PSB guide.

What a PSB determination actually costs

The cost is large. The corporation loses the small business deduction, the low rate you incorporated for, and most deductions beyond salary paid to you. An extra federal tax applies on top of the general rate. Across several reviewed years, the result is usually worse than having been an employee.

Contract terms are evidence, and most are written by the client

Your engagement letter was almost certainly drafted for the client’s convenience, not your tax position. Exclusivity, fixed hours, on-site presence and client-supplied equipment count against you; multiple clients, your own equipment, deliverables rather than assigned hours, and your own insurance count for you. We read the contracts and tell you honestly where you sit, including when restructuring is the right call.

Expenses, HST and the ordinary compliance year

Without live PSB risk, an Ottawa consultancy is a simple file: HST on fees, a home office where it is truly the base, vehicle costs for real business travel, and a salary-dividend split recalculated yearly. With live risk, salary to the incorporated employee becomes one of the few deductible amounts, changing the calculation.

If you think you may already be exposed

The worst PSB problem is one found reviewing prior years, when the assessment covers every year and interest has run throughout. If you recognized your arrangement in the test above, establish the position now, before you are asked.

There are usually three routes, depending on how clear-cut the facts are. First, change the relationship going forward — more clients, your own equipment, deliverable-based terms — so future years look materially different. Second, accept the treatment and plan around it: salary to the incorporated employee stays deductible, which reshapes the salary-and-dividend calculation. Third, where past filings were wrong rather than arguable, correct them through the CRA’s Voluntary Disclosures Program, far better used before contact than after.

We will tell you honestly which of the three your situation calls for, including when the answer is that the exposure is real and worth addressing rather than arguing.

What EverStone handles for you

One CPA, one fixed fee agreed up front:

• T2 corporate return and year-end financial statements
• PSB exposure reviewed against your actual contracts
• HST registration and filings
• Home office and vehicle claims supported properly
• Salary-versus-dividend mix recalculated each year
• Your personal T1 coordinated with the corporate return
• CRA correspondence handled for you

Fixed fees, fully online

EverStone is a CPA firm working with Ottawa clients entirely online. The fee is fixed and agreed before work begins, which is what makes a call about a new contract worth making. See what it costs.

Time worked but not yet invoiced at the year-end date is the figure that most often distorts a consulting year. See financial statements for Ottawa consultants and government suppliers.

Where the firm has grown into employed staff, fractional CFO support for Ottawa consultancies covers utilization, bench cost and rate card construction.

Remote accounting for consultants

EverStone is a fully virtual, one-CPA firm serving Ottawa online. There is no Ottawa office and no local staff. We meet by video or phone, exchange documents securely, and handle the personal services business and salary-versus-dividend questions together, because they interact.