As any Canadian small business owner will tell you, monthly federal payroll remittances are are formidable foe. This isn’t because of the amount of paperwork — it’s one form, three fields, and a cheque — but simply because the penalty for not remitting by the 15th of the month is immediate and severe.
I encountered this for the first time last year when, because I had the flu and was at home sick, the remittance envelope was late into the mail, and arrived at Revenue Canada 2 days late. The penalty for that 2-day tardiness? Just over $250.00.
I disputed the penalty, explaining that I’m the only person doing the monthly payroll, and couldn’t be expected to do this from my sickbed. They were unforgiving, and, after a length review period, my request was turned down with the explanation that I didn’t have a valid excuse and should have made other arrangements. Fair enough, I suppose.
There’s nothing like a $250 penalty to chasten you, and so since that time I’ve been obsessive about getting the brown Revenue Canada envelope off well in advance of the deadline.
Before I headed off to Italy for two weeks last fall, a trip that spanned the end-of-month payroll time, I prepared everything well in advance, and had my remittances off to Revenue Canada by November 24th.
They claim to have never received them, and I got whacked with another penalty.
This time, though, justice and truth were on my side: another cheque, sent in the same envelope, was cashed, proving that they received the envelope and that it was a processing error on their end, not mine.
It only took five months to sort out, but my dispute of this penalty was — miracle of miracles — accepted, and the penalty was canceled. Here’s the letter I got from CRA a few weeks ago (personal CRA staff details excised):
Note that they felt compelled to add a “before you go off half-cocked and thing you’ve got a free ride in future” paragraph before signing off, just so my chastening wouldn’t wear off as a result of this minor victory.