Plain Language Toolkit

Tax Returns

For Sole Proprietorships and Partnerships, business income is generally reported on a calendar-year basis. To account for business income earned, form T2125 (Statement of Business or Professional Activities) must be submitted with income taxes. All business income, no matter how small, must be reported. Business expenses are costs than an owner incurs for the sole purpose of earning business income. Business expenses must be supported with invoices, receipts etc.  You have to register for a GST account if you provide taxable supplies in Canada and you are not a small supplier. However, most microenterprises are ‘small suppliers’ because their revenue is less than the $30,000 annual threshold.  If a business generates more than $30,000 in a calendar year, then they are no longer considered a small supplier and must register for a GST account.  You must register to collect and remit PST if you regularly sell taxable goods, provide related services to taxable goods, or install taxable goods. You are not required to register for PST if you qualify as a ‘small seller’. You qualify as a ‘small seller’ if you have $10,000 or less in gross revenue for the previous 12 months, and your estimated gross revenue for the next 12 months is $10,000 or less.

PWD benefits are non-taxable. In 2016, the basic personal amount that a person can earn before being required to pay taxes is $11,327 (this is in addition to PWD benefits). Simple returns can generally be completed for low cost by using tax software; for more complex returns it is recommended to utilize the service of a tax expert or accountant.

More information can be found at:

Business Insurance

Please note: the following is not legal advice nor are the authors qualified to provide legal advice. For a legal opinion we recommend that clients obtain legal advice or speak to an insurance advisor.

An important question for all small or microbusiness is what level of insurance coverage is necessary. As with everything we do in life, operating a business always involves a degree of risk. Many of the risks involved in business are inevitable and are considered normal, risks such as market fluctuations, supply challenges, mistakes, etc. These risks are usually controlled through good management practice. However some risks such as legal liability, unforeseen damages to property, etc, can be mitigated through insurance.

For many part time businesses or microenterprises, insurance costs can be prohibitively expensive. Whether the business is full time, or part time, minimum insurance costs can often range from $600 to $1000 annually.  For some businesses with a very small profit margin, this may eat up a significant amount of the profit.

In order to decide what insurance coverage is necessary, the business owner should first understand what different insurance coverages are available. For example, there are different types of property insurance for businesses who own a building, and automobile, or perhaps just contents such as machines, equipment or inventory inside a building. Additionally there is liability insurance, which covers legal expenses and awards in case somebody was injured and sued for damages. There is also errors and omission insurance for those providing consulting services, directors insurance for corporations, etc. More information about what insurance is available and applicable can be determined in partnership with a qualified broker.

At the end of the day, evaluating insurance needs should be based on risk management principles. Insurance does not eliminate all risk, it only minimizes particular area of risk. For example, property insurance may cover fires, but not earthquakes. With that in mind, it is important to determine the level of risk before deciding what insurance to purchase.

How does one go about determining the measure of risk? We suggest that each identifiable risk be evaluated based on three criteria; probability of the event occurring, exposure to the event, and consequences of the event; the lower these three criteria, the lower the overall level of risk. At the end of the day, it is up to each business owner to determine what level of risk they are comfortable with, and what level of insurance they require to meet this risk.

Probability speaks to the likelihood of an incident occurring. Different occupations have different risks inherent to them. As a general rule, jobs which utilize power tools and equipment or physically alter the environment tend to carry higher risks of physical injury. However, people can be injured anywhere! Keep in mind that it is impossible to completely prevent incidents from happening to a business, but some situations may be very low likelihood, others might be high.

The second criterion for assessing level of risk is to determine what the consequences of an event might be. If the business is a main source of income or is tied to substantial assets (eg. a home mortgage) than the consequences of a serious incident could be substantial. However, if the business owner does not have significant personal assets and does not depend on the income of the business for living expenses, than the consequences of a business setback or incident may be significantly less.

Exposure has to do with how protected the business is in case an incident does occur. Insurance is one way to reduce exposure, as it means that the insurance company would bear a significant portion of the cost of reparations (excluding deductible and anything not covered by the policy). Other ways of reducing exposure to risk could include following due diligence, safe practice and procedure, etc.

Determining the level of business insurance coverage necessary should be based on an overall assessment of risk, taking into account probability, consequence and exposure. In cases of low probability but high consequence and individual may opt to lower exposure by purchasing insurance. However, in cases where an assessment determines that probability of an insurable event occurring as well as the consequences in the case of an insurable event are fairly low, a person may decide business insurance is not worthwhile.

Building a Website

There are options for creating a completely free website on the web, but generally these options are limited in features. For example, they will often be supported by advertising, which doesn’t look professional, and they do not allow for a customized domain (web address). For best results, it is recommended to buy a custom domain and pay for hosting. There are likely many web based tutorials for how to do this, but here is one that we recommend for it’s simple, cost effective step by step instructions: