When it comes to operating a small business in Toronto you have to be constantly thinking of how you can save on your tax obligations. While there are a lot of business tax incentives in place for small business it is not enough, and you have to learn to be legally creative with your tax planning.
It could be that your business is at the crossroads where it has grown and you really could use some extra help, but at the same time the extra funds are just not there to support hiring. There is a possible tax incentive that you could take advantage of and at the same time solve your staffing issue.
What you may want to take a look at is the Apprenticeship Job Creation Tax Credit (AJCTC). The reason this particular tax credit is in place is not because the CRA is feeling kind towards your strapped cash flow, but as an incentive to encourage businesses to hire throughout various trades, and to help them do this by taken away some of the burden of wages.
The maximum employer credit that you can claim is $2,000 for each year the apprentice remains with you. You can claim 10% of the salaries and wages payable to the apprentice up to this max amount. What you need to realize is that there is set criteria regarding the apprentice and you can only utilize this credit if the individual fits into that criteria. In order for the apprentice to be qualified he/she has to be working in a prescribed trade applicable to their apprenticeship contract for the first two years. The contact has to be registered with one of the three levels of government and is a certified or licensed apprenticeship which will lead to certification or licensing in the trade.
The Red Seal Trades are also included in the prescribed trades.
If this is something that is of interest to you and you feel that your particular industry would meet the criteria that the apprentice has to abide by then it would be worth checking into.
The other aspect that you may want to consider is that if you currently have an employee that performs well but needs further education to become licensed or certified in your industry and it is an eligible trade, then you may want to suggest to them to become involved in an apprenticeship program. There are possible grants available to help with this.
It is well known that there is a big shortage in tradespeople, and if this is a concern of yours then planning for your future needs for skilled help is as important as keeping track of your tax dollars and incentives.
Be sure to talk to us here at Toronto Accountant when we do your business taxes for you about the potential options of hiring an apprentice.
