Are You Considering An Electric Vehicle For Your Business?

Zero emission vehicles purchased on or after March 19, 2019, will be eligible for capital cost allowance (CCA) at 100% with no half-year rule.

Only new vehicles will qualify, and they must be fully electric, a plug-in hybrid with a battery capacity of at least 15 kWh or fully powered by hydrogen.

Two new CCA classes will be added for that purpose:

· Class 54 for zero-emission vehicles otherwise included in Class 10 or 10.1 (which presently include most motor vehicles)

· Class 55 for zero-emission vehicles otherwise included in Class 16 (which presently includes heavy freight tractor units and taxicabs)

In the case of class 54, the amount on which CCA can be claimed will be limited to $55,000 (plus sales taxes) per vehicle.

To parallel the income tax proposals, Budget 2019 proposes to increase the amount of GST/HST that businesses can recover in respect of zero-emission passenger vehicles.

The 100% rate will apply from March 19, 2019, to the end of 2023. For acquisitions in calendar 2024 and 2025, the first-year enhanced allowance will decline to 75%, with a further decline to 55% for 2026 and 2027.

Any undepreciated capital cost remaining after the year of acquisition will be eligible for CCA of 30% (Class 54, the same as Class 10 and 10.1) or 40% (Class 55, the same as Class 16). CCA must be prorated for short taxation years. When a Class 55 vehicle is disposed of, the proceeds which reduce the undepreciated capital cost pool will be prorated based on the total cost compared to the $55,000 depreciable limit.

An election to forego these special rules, and place these vehicles in Class 10, 10.1 or 16, will be available.

Travel expenses; What you need to know

As a business owner, you can deduct travel expenses you incur to earn business and professional income. Airfare, hotels, car rentals, mileage, and other miscellaneous expenses such as laundry costs can be written off. Meals are also deductible, but only at 50%.

A business purpose to a trip could be anything, as long as it is valid. You could be meeting a new supplier, attending a convention related to your business, or visiting your rental properties. Be prepared to have good documentation to prove that it was a business trip. Comic book conventions, concerts, and any other entertainment type of event will not qualify.

If you are driving your vehicle to the destination, you must keep track of your mileage and claim the trip as part of your business-use percentage.

You are certainly allowed to mix business with pleasure; however, you can only claim the travel expenses, accommodation and meals for the days you were away for business purposes. The other days will have to be kept separated.

You can take your family along on business trips; however, only the costs directly associated with you and your business will count towards the deductible expenses, unless they are active in the business.

What You Need To Know Before You Start A Business?

One of the most common question I get asked by my clients who are about start their business or side hustle is : What do I need to know?

So, I decided to put together this booklet to help anyone who is wondering what his first steps need to be when starting a business, from deciding about the legal structure to choose, to how to organize your paper work and do your bookkeeping to how to pay yourself, and many other topics in between.

I hope you'll enjoy reading it and will help you start on the right foot. Best of luck!

(Link to the document is in the "Resources Tab")