Tax Services

Short answer: Tax at Bronte Bay is not just about filing returns — it is about paying the least tax legally possible, on time, every year. We provide corporate tax (T2), personal tax (T1), HST/GST filing, SR&ED claims, payroll tax compliance, and CRA audit support for incorporated businesses and professionals across Toronto, Vancouver, and Canada — with year-round planning, not just year-end scrambling.

Most incorporated businesses overpay tax — not because they are dishonest, but because they are not planning. They file their return after the year is closed, when every decision that could have reduced the bill has already been made. At Bronte Bay, tax planning happens throughout the year — before the fiscal year closes, before income is earned, before the decisions that create the tax obligation are locked in.

Nearly 40 years of Canadian CPA experience means we know the rules in detail — the rates, the deductions, the credits, the deadlines, and the CRA’s audit priorities. Here is exactly what we do.

Corporate Income Tax (T2)

Every Canadian corporation must file a T2 corporate income tax return within six months of its fiscal year-end. Late filing attracts a 5% penalty on the unpaid tax balance plus 1% per month — costs that are entirely avoidable. Bronte Bay prepares and files your T2 accurately and on time, every year.

But filing the return is the last step. The real work — the work that determines how much you actually owe — happens throughout the year:

Personal Tax (T1) for Business Owners and Professionals

For incorporated business owners, your personal T1 return does not exist in isolation — it is one half of a coordinated personal and corporate tax plan. The salary/dividend split you take from your corporation, your RRSP contributions, your investment income, and your rental properties all interact. Getting the personal return right requires understanding the whole picture.

T1 Filing for Incorporated Owners

1. Employment income (T4) — salary portion of compensation from your corporation
2. Dividend income — eligible and non-eligible dividends taxed at different effective rates through the dividend tax credit mechanism
3. RRSP deduction optimization — maximizing RRSP room generated by salary income; 2026 limit $32,490 or 18% of 2025 earned income
4. Investment income — interest, dividends, and capital gains from personal portfolios; TFSA strategy (2026 cumulative room $102,000)
5. Capital gains on property or asset dispositions — including principal residence exemption claims and LCGE planning (~$1.25M on QSBC shares)

T1 Filing for Self-Employed and Unincorporated Professionals

1. Form T2125 — Statement of Business or Professional Activities; net income after all deductible expenses
2. CPP contributions — both employee (5.95%) and employer (5.95%) portions on earnings up to YMPE $73,200; plus CPP2 4% on earnings between YMPE and YAMPE $81,200
3. Home office, vehicle, and all eligible self-employment deductions — ensuring every legitimate expense is captured and documented
4. Quarterly tax instalment planning — Mar 15, Jun 15, Sep 15, Dec 15 — avoiding CRA interest on underpayments
5. HST registration timing — advising on voluntary vs mandatory registration as revenue approaches the $30,000 threshold

Key T1 Deadlines — 2026

HST / GST Filing and Compliance

HST is mandatory once your taxable revenue exceeds $30,000 in a single quarter or four consecutive quarters. The CRA charges 3%–10% penalties for late remittances plus compound daily interest — costs that grow quietly until they are discovered. Bronte Bay tracks HST collected and Input Tax Credits (ITCs) throughout each filing period in Xero and remits on time, every time.

1. HST registration — advice on voluntary vs mandatory registration and optimal timing for your business model. Ontario 13% HST; BC 5% GST + 7% BC PST (PST separate from GST in BC)
2. Tax code configuration in Xero — correct setup for taxable, zero-rated, and exempt supplies specific to your industry. Miscoded supplies mean missed ITCs or overcollected HST — both create CRA exposure
3. ITC maximization — every eligible input tax credit claimed on every business expense. Missed ITCs are money left on the table — permanently, since ITCs have a 4-year claiming window
4. Monthly, quarterly, or annual filing — filed and remitted to CRA on time per your CRA-assigned frequency. Monthly for businesses over $6M; quarterly for $1.5M–$6M; annual for under $1.5M
5. Industry-specific HST rules — HST exemptions for medical services, financial services, and long-term residential rentals; zero-rating for exports and services to non-residents; special rules for mixed-use properties
6. Retroactive HST correction — if you crossed the threshold without registering, Bronte Bay manages the voluntary disclosure process to minimize CRA penalties on the unremitted HST

📋 CPA Note: BC clients — GST (5%) applies in BC, not HST. PST (7%) is collected separately by the province and does not go on the federal GST return. If you sell goods or services that are PST-applicable in BC, Bronte Bay ensures you are registered for both GST (CRA) and PST (BC Ministry of Finance) and filing correctly for each.

SR&ED Tax Credits — Canada’s Most Underused Business Incentive

The Scientific Research and Experimental Development (SR&ED) program is Canada’s largest business support program, distributing $4.5 billion annually in tax credits. Canadian-controlled private corporations (CCPCs) receive a 35% refundable investment tax credit on up to $6 million in eligible R&D expenditures — meaning you receive a cheque from the CRA even if you owe no corporate tax.

Most businesses that qualify are not claiming. Qualifying activities include software development, product prototyping, manufacturing process improvement, and applied research — you do not need a dedicated research lab. Bronte Bay identifies eligible activities, sets up the contemporaneous documentation system required by the CRA to support the claim, and prepares the full T661 and Schedule 31 at year-end.

Does Your Business Qualify for SR&ED?

SR&ED eligibility requires that the work involves a technological uncertainty — a problem that cannot be solved using standard practice — and that you undertook a systematic investigation to resolve it. Qualifying activities do not require a lab coat:

• Software development — developing new algorithms, overcoming performance limitations, creating novel architectures
• Product prototyping — testing new materials, designs, or manufacturing methods where the outcome is uncertain
• Manufacturing process improvement — experimenting to improve yield, reduce defects, or solve production problems not solvable through standard engineering
• Formulation development — food, pharmaceutical, cosmetic, or chemical formulations where the combination of ingredients produces unpredictable results
• Applied research — advancing scientific knowledge in support of a commercial objective

The most common reason eligible businesses fail to claim SR&ED is insufficient contemporaneous documentation — the CRA requires that you recorded the uncertainty, your hypothesis, your experiments, and your results as they happened, not reconstructed at year-end. Bronte Bay sets up the documentation system from the start of the claim year so that the evidence is in place when the T661 is filed.

Payroll Tax Compliance

Payroll deductions — CPP, CPP2, EI, and income tax — must be calculated correctly at current CRA rates and remitted on time. Late or incorrect remittances attract CRA penalties and interest that accumulate quickly. Bronte Bay runs payroll through Wagepoint, integrated with Xero, ensuring:

1. CPP (5.95%) on earnings up to YMPE $73,200; CPP2 (4%) on earnings between YMPE $73,200 and YAMPE $81,200; calculated at 2026 CRA rates
2. EI (1.64%) employee premium on insurable earnings up to $65,700; employer rate 1.4× employee rate
3. Provincial income tax deductions calculated correctly for Ontario and BC — separate provincial TD1 forms, provincial surtax in Ontario
4. CRA payroll remittances — monthly, quarterly, or accelerated as required — submitted on time by the 15th of the following month
5. T4 slips prepared and filed with CRA and distributed to all employees by the February 28 deadline
6. Records of Employment (ROEs) filed within 5 calendar days when employees leave, are laid off, or have an interruption of earnings
7. Ontario Employer Health Tax (EHT) — calculated and remitted for Ontario employers with annual Ontario payroll above $1,000,000 (2026 exemption $1,000,000)

CRA Audit Support and Voluntary Disclosure

A CRA review, audit, or reassessment requires organized, accurate records and professional representation. Bronte Bay supports clients through all types of CRA correspondence and examination:

1. CRA audit representation — as your authorized CRA representative (Level 2 on CRA My Business Account), Bronte Bay liaises directly with the CRA on your behalf. You do not deal with the auditor directly.
2. Document preparation — organized, reconciled records produced promptly from your Xero books and Hubdoc receipt library. Clean books make CRA reviews straightforward.
3. Notice of objection — if you disagree with a CRA reassessment, Bronte Bay prepares and files a formal objection within the 90-day deadline, with full supporting documentation
4. Voluntary Disclosure Program (VDP) — if you have unfiled returns or unreported income, the CRA’s VDP allows you to come forward proactively and reduce or eliminate penalties and prosecution risk. Bronte Bay manages voluntary disclosures, reconstructs prior-year records, and submits the VDP application.
5. Taxpayer Relief applications — where CRA penalties or interest arose from circumstances beyond your control (illness, natural disaster, CRA error), Bronte Bay prepares taxpayer relief requests to have them cancelled or waived

📋 CPA Note: The businesses that fare worst in CRA audits are those with disorganized records — not those with the most complex situations. A business with clean, current Xero books, receipts attached in Hubdoc, and reconciled bank statements can respond to almost any CRA inquiry quickly and confidently. This is the single most practical benefit of maintaining proper books throughout the year rather than scrambling at tax time.

Key Canadian Tax Deadlines — 2026

Frequently Asked Questions

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