Personal Service Business (PSB) Solutions
Personal Service Business (PSB) Solutions
If you have concerns about Personal Services Business (PSB) legislation and your specific circumstances, pick up the phone and call us, or better yet, come in to our Calgary office for a free consultation and an explanation. Each situation and business is unique so you need to find out what your options are, and how you can protect yourself. Many people do not understand what a Personal Service Business is or if there is a solution to their Personal Services Business problem. Once people have a basic understanding of what a PSB is, they get very concerned about how the CRA will deal with them if they find them to be a Personal Services Business. The CRA has made rulings on Personal Services Businesses and in other cases the CRA was unsuccessful in assessing companies as Personal Services Businesses.
Personal Services Business (PSB) legislation is extremely complex and vague. There are no absolutes and the CRA has been conspicuously quiet on the subject. There are no CRA Interpretation Bulletins that deal with the specifics of a PSB. All you will find from the CRA is that PSB’s are not entitled to the small business deduction and that expenses other than salary are not allowed.
In addition to the above, there is a plethora of misinformation and fear mongering articles telling you how you are DOOMED if you are a contractor with only one client. Some accountants even take it upon themselves to “determine” if you are a PSB and will file your taxes as if you are. If you are told by anyone (even the CRA) that you are absolutely, positively a Personal Services Business (PSB), then you are likely being lied to.
In an effort to provide you with the best possible information about PSB legislation, please check out the information below.
A PSB exists where there is a working relationship between a worker and an employer which could be viewed as an employer-employee relationship except for the existence of a corporation owned by the worker through which the worker provides services, and through which the employer pays the worker for their services.
Note: A Personal Services Business can also be referred to as a Personal Services Corporation.