Income Tax Arrears

Posted on Tuesday, August 29, 2006

We are self employed and owe a total of 7,000 dollars on income tax and gst. We barely can afford to buy gas for our business. According to our accountant we should not be in business. What to do when you live in a shoe and cannot even afford to buy everyday things. I am two years away from pension and partner is 56. What do I do. Claim bankruptcy and go on welfare?

1 Comments:

At 8:52 AM, J. Douglas Hoyes, CA, Trustee said…

Bankruptcy may be an option, but it would appear that the bigger question is what to do about your business. Is your business viable? Do you have the potential to earn income from the business? Your accountant believes you should not be in business. The business appears to be losing money, since you owe the government and have not been able to pay them.

If you believe you can turn the business around and make it profitable, it may make sense to stay in business. However, if each month you continue to lose money, you would be better off closing the business, selling whatever assets the business has, and using that money to pay the government, or to live on.

As a business owner myself I understand the advantages of being self-employed. However, if you are losing money, you may be better off working at a regular job where you at least get a paycheque every week.

I suggest you discuss this again with your accountant, and if the debts are more than you can manage you should also consult a trustee to discuss the bankruptcy option.