Accountant for Victoria consultants

Ottawa has a similar contracting market; the Ottawa consultant page covers it from the federal side. The Victoria accountant page covers the wider BC picture.

Incorporating: when it pays and when it does not

A corporation pays tax at small-business rates on active income it keeps. That only saves money if you leave some of it in the company; income paid straight out as salary or dividends is taxed at roughly the same total as if you had earned it personally. For a consultant who needs every dollar to live on, incorporating mostly adds cost: a T2, financial statements, a BC annual report and a separate bank account.

Where you earn more than you spend, the deferral can be worth it, and a corporation also makes it easier to take on a second client or a subcontractor later. We compare both paths on your actual rate and hours. The BC incorporation guide and should I incorporate set out the trade-off.

When one public client is effectively your employer

The personal services business rules apply where, if your corporation did not exist, you would reasonably be regarded as an employee of the client. For a consultant who sits in a ministry office on a multi-year contract, works set hours, uses a government laptop and reports to a director, the facts can lean that way. The client being a public body does not change the test.

If the rules apply, the corporation loses the small business deduction and most deductions on that income, with an extra federal tax on top. Several reassessed years can cost more than having been on payroll. Our free PSB risk assessment walks through the factors, and the worker classification guide explains how the CRA weighs them. A second client, deliverable-based terms and your own equipment all help.

If you recognise your own arrangement, act before the CRA asks. Going forward, you can change the substance of the work or plan around the rules, since salary to you remains deductible either way. Where past returns were wrong rather than arguable, the Voluntary Disclosures Program exists for exactly this and works better before contact than after.

GST registration and invoicing a public body

Once taxable revenue passes $30,000 in four consecutive calendar quarters, GST registration is mandatory, and most full-time consultants cross that quickly. Registration also recovers the GST on your laptop, software and professional fees. Consulting services are generally not subject to BC PST, though some related services are, such as software and legal services, so check if your work includes either.

Public bodies are careful payers but strict about paperwork. An invoice needs your GST number, the contract or purchase order reference, the period covered and a clear total, and anything missing sends it back to the start of the approval queue. Some public bodies have their own GST status or instructions, so read the contract’s invoicing terms before assuming how tax is charged. Track receivables weekly; the receivables guide helps.

Paying yourself, and the year-end

Inside a corporation you choose between salary, dividends or a mix. Salary creates RRSP room and CPP, and it is one of the few amounts that stays deductible even if the PSB rules apply. Dividends are simpler to administer. The right mix changes with your income and your plans, so it is worth recalculating every year; the salary versus dividends calculator is a start, and payroll in Victoria covers remittances and T4s.

At year-end, work done but not yet billed belongs in the right year, and a home office claim needs to reflect where the work really happens. Corporate tax in Victoria covers the T2, due six months after year-end.

What EverStone handles for you

One CPA, one fixed fee agreed up front:

• Incorporation decision modelled on your real income
• PSB exposure reviewed against your contracts
• GST registration, invoicing set-up and returns
• T2 and year-end financial statements
• Salary and dividend mix recalculated each year
• Your personal T1 coordinated with the corporation

Fixed fees, fully online

We are in the same time zone as you, and nothing needs a sailing. A self-employed T1 with schedules commonly runs $250 to $450; corporate work is quoted after a free consultation, and a 45-minute Advice Call is a flat $200 + GST if you want one question answered before signing a contract. See what it costs.

Remote accounting for consultants from Abbotsford

EverStone is a sole practitioner CPA firm at 32615 South Fraser Way in Abbotsford, serving Victoria businesses entirely online. There is no Victoria office and no local staff. Meetings are held by video or phone, documents are exchanged securely by email, e-signature and a secure upload link, and no visit is required at any point. Contracts, invoices and the PSB question are reviewed together, because they affect each other.