201710.12
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Retail Workers Next on the Liberals’ Hit List!

Retail Workers Next on the Liberals’ Hit List!


Alberta Divorce Finances


The Canadian Revenue Agency recently issued guidelines to business owners that could pave the way for new taxation on
merchandise purchased with an employee discount.
 
On it’s website, CRA has provided a new interpretation of an existing law that says merchandise discounts should be treated as a taxable benefit. In other words, the value of the discount should now be treated as income.
Retail employees receiving a 25% discount on the $100 sweater will now pay tax on the $25 saved (the difference between the market price of $100 and the discounted price the employee will pay of $75). 
Many employees receive significant discounts on merchandise, a perk in exchange for a modest income, most commonly addressing jobs in the retail sector. They and their employers will now have to track the discounts throughout the tax year.
It is likely that this tax will cost more to administer than the small amount of revenue it will bring into the federal purse.
Is Trudeau running out of money to pay for the Liberal program of spending? It would seem so! They are now asking CRA to find them more!
If you have a client who receives discounts, their line 150 income will now increase. For example, if you have a client (perhaps a wife that has returned to work due to separation) and her income will enter into the determination of spousal support or child support (in a shared arrangement); her income has just increased by the discounts she received at work but for cash she never received.
As an additional note, the Trudeau government will also be eliminating the Public Transit tax credit equal to a 15% tax savings on money spent on certain transit expenses.
For clients going through separation and divorce, at the most difficult time in their life, those that are earning a modest living, will have yet another hand in their pocket leaving them with even less to live on.