Behind on tax or books? Where to start
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Work out what is unfiled, rebuild the books for those years, then file the money you held for others first and the income tax returns after.
Short answer: list what is unfiled, and check whether the CRA has written to you. Then rebuild the books for the years involved, because no return is right without them. File payroll, GST and PST first from those books, since they are money held for others, and the income tax returns after, oldest year first. If the CRA has not contacted you about the issue, ask about the Voluntary Disclosures Program before you file, because coming forward early earns the most relief. Each late filing has its own guide below.
What order should I catch up in?
- List every return and remittance that is late: payroll, GST/HST, PST, T4 and T5 slips, the T2 or T1, and the BC annual report.
- Check whether the CRA or the province has already written to you, and keep every letter.
- If the CRA has not contacted you about the issue, ask about the Voluntary Disclosures Program before you file anything late.
- Rebuild the bookkeeping for the years involved from bank and card statements, so every return rests on real records.
- File and pay the amounts held for others first: payroll deductions, then GST and PST collected.
- File the income tax returns, oldest year first.
- Set up monthly books so you do not fall behind again.
Which guide covers which late filing?
| What is late | Guide |
|---|---|
| Corporate T2 return | Unfiled corporate tax returns, and T2 deadline and penalties |
| Personal T1 as a self-employed person | Late T1 filing penalties for the self-employed |
| GST/HST return | Late GST/HST return penalties |
| Payroll remittances | Late payroll remittances and penalties |
| T4 and T5 slips | Late T4 and T5 slips and penalties |
| A return that was wrong | Amending a T1 or T2 |
| A notice from the CRA | Notice of reassessment and the 90-day objection, and CRA audit letters |
| The BC annual report | Covered in the BC small business tax calendar |
Should I come forward before the CRA contacts me?
The CRA’s Voluntary Disclosures Program gives the most relief when you apply before the CRA contacts you about the issue. An application made after contact can still earn partial relief, depending on the letter. The CRA decides each application, so read the voluntary disclosures guide, and ask a tax professional if the amounts are large.
What your books need to show
- Every bank and card statement for the period, even before the books are posted.
- Sales and purchase records, so GST and PST can be worked out for each period.
- Payroll records: who was paid, when, and what was deducted.
- A list of the notices received and the dates, so nothing is missed.
I am years behind on bookkeeping. Where do I start?
List what is unfiled and owing, rebuild the books for the years involved, file what you hold for others first (payroll, GST, PST), then the income tax returns.
What should I file first, GST or the T2?
Rebuild the books first, then file the amounts you collected for others, such as payroll deductions and GST and PST, and the income tax returns after, oldest first.
Should I contact the CRA before filing late returns?
If the CRA has not contacted you about the issue, the Voluntary Disclosures Program gives the most relief, and it can give partial relief after contact. The conditions are the CRA’s, so check them before you file.
Can a bookkeeper catch up several years of books?
Yes. Orbis Accounting Ltd. rebuilds the records from bank and card statements, then files the GST and PST and runs the payroll for the years involved. Income tax returns are quoted separately.
Unfiled corporate tax returns →
T2 deadline and late penalties →
Late T1 for the self-employed →
Want this handled for you
This is the work we do for clients every month. Tell us what you sell and where your books stand, and a written plan and a fixed monthly price follow within one business day.
info@orbisaccounting.ca