A consultant was audited on $20,000 of home-office, vehicle and subcontractor costs. We defended 90% of the deductions.
A self-employed consultant faced a review of home-office, vehicle, and subcontractor expenses. We compiled a floor-plan for the workspace claim, mileage logs, and subcontractor invoices with proof of payment. The auditor accepted 90% of the deductions, saving the client about $18,800.
Professional practices are taxed on work in progress and face personal services business risk where one client dominates.
A review is won on documentation created at the time, not on explanations offered afterwards. The CRA asks for the source records behind a figure, and an unsupported claim is simply disallowed.
Why it bites: Most reassessments we reverse are not the result of a wrong position — they are the result of a correct position with no contemporaneous paper trail behind it.
T1 returns are due April 30, and June 15 for the self-employed — but any balance owing is due April 30 regardless, with interest compounding daily from that date.
Why it bites: The June deadline misleads a great many self-employed filers into paying two months late without realising it.
An expense is deductible where it was incurred to earn income and is reasonable in the circumstances. The business-use portion must be supported, which for vehicles means a logbook.
Why it bites: The CRA rarely argues that an expense category is wrong; it argues that the proportion claimed was never substantiated.
Every engagement above was priced as a fixed fee agreed before the work started, and paid only once the client had reviewed the result. If any of this looks like your situation, the first step is a free 15-minute call — we will tell you plainly whether there is anything worth doing.
Reviewed by Udit Gupta, Founder and Tax Accountant for the 2025 tax year. This case study is based on a real client engagement handled by Tax Filings Canada; the client's name and identifying details have been changed. Outcomes depend on your own facts.
Sources. CRA — Businesses · Income Tax Act (Justice Laws Website)
