I am wondering if the CRA takes any action against not filing T4A slips (fee for service and especially for independent contractors). I have observed many clients failing to file T4As. Have you noticed any adverse actions by the CRA regarding the non-filing of T4A slips? Recently, I filed T4A slips for one of our clients who was late, and they incurred a $100 penalty for late filing. If the CRA is overlooking the non-filing of T4As, why does it penalize those who file them, albeit late?
By policy, it is not enforced.
I filed 3 T4As late but filed 17 on time. I will be interested in seeing what happens. I was tempted to just send the people without T4As a summary of what they were paid then ended up filing anyhow. I believe currently there are no consequences for not filing becasue I don’t think CRA actually knows who all should be filing or in what circumstances. It seems to be up to us as professionals to decide, because CRA gies us no clear guidelines. So if I file late, I get a penalty. If I don’t file, no consequences. No unlike UHT and Trust reporting. CRA has an idea but can issue no workable solutions. Meanwhile they collect some extra tax and accountants get to do some extra billing.
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In my experience, CRA is catching the non filing of T4As when Subcontractor is claimed as an expense on either T2125 or S125… they are cross referencing. Yes, penalty for late filing is being applied to files I have come across.
At one point I was not using any subcontractors for that specific reason but seem to have forgotten why I was doing it. With anyone in construction industry I would make sure that T5018 are issued - I think those are important.
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I concur with @helga_spence and @obhorst - CRA has stated they are not enforcing penalties for missing or late filed T4A slips, where it is just to report box 48 amounts. However, there are exceptions for T5018s and certain market sectors where they believe the payor and payee are colluding to evade tax (i.e. underground economy - paying cash, etc). If the payor is trying to claim a deduction for payments to a contractor and the contractor is not reporting that income, CRA can only follow the “evidence” - that is, without a T4A slip, CRA would have no information about the contractor, but they do have the “Subcontractor expense” on the payor’s tax return, so they could (if they wanted) charge penalties for late filed T4A slips.
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