A general contractor faced a CRA review of unreported subcontractor payments. We reconciled every T5018 and cleared a proposed $54,000 reassessment down to nil.
A mid-sized construction firm was flagged when its T5018 subcontractor filings did not match the amounts subcontractors reported. The CRA proposed a $54,000 adjustment. We rebuilt the subcontractor ledger, matched every payment to invoices and cheques, corrected two misfiled slips, and filed a structured response. The reassessment was withdrawn in full.
Construction files carry subcontractor reporting, holdbacks and heavy equipment, and the CRA cross-checks the payment chain automatically.
Construction payers must file a T5018 information return listing every subcontractor payment, and the CRA matches those slips against what the subcontractors themselves report.
Why it bites: A mismatch is one of the most reliably automated audit triggers in the tax system: it needs no human reviewer to surface, and it lands as a proposed reassessment rather than a question.
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.
Employers withhold CPP, EI and income tax and remit on a schedule set by their average monthly withholding. Late remittance carries a penalty of 3% to 10%, rising to 20% for a repeat failure with gross negligence in the same year.
Why it bites: Payroll penalties compound quietly. An employer that drifts one cycle late each quarter can owe more in penalties than in the tax it was late paying.
A CCPC files its T2 within six months of year-end, with the balance due two months after (three where the small business deduction is claimed). The 9% federal small business rate applies to the first $500,000 of active business income.
Why it bites: The filing and payment deadlines differ, and interest runs from the payment date. Filing on time while paying late still costs money.
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 for the 2025 tax year by Udit Gupta, Certified Tax Accountant. Figures describe a real engagement; outcomes depend on your own facts. Client details are omitted for confidentiality.
