On June 27, 2010 the Canada Revenue Agency announced changes to logbook requirements.¬† They’ve been hinting at this for a couple of years or so, and it’s great to see they produced some action.

First, a bit of background on logbooks.¬† If you use your vehicle in your job or business, and you wish to deduct vehicle expenses from your income, you are required to keep a logbook.¬† Why?¬† Well, it’s because the government wants us to be able to prove what the actual business use of the vehicle is.¬† Most of us use our vehicles for both business and pleasure driving.¬† By keeping a logbook, we are able to identify what the exact amount of business use is.

Keeping a logbook really isn’t that difficult.¬†¬†To begin, you write down the odometer reading at the start of the year.¬† Next, during the year you log your business trips that you make with your vehicle. For example, if you go to visit a client at his business place, you should record the date of the trip, the distance, and the purpose of the visit.¬† Last of all, at the end of the year, record the vehicle’s closing odometer.

By following these steps, we can very easily determine the business portion of the vehicle, simply by adding up all the business kilometres, and dividing this by the total kilometres driven.  To illustrate, lets suppose that all of your business kilometres added up to 10,000, and the total distance driven with the vehicle during that year was 20,000.  That means that we can claim 50% of your vehicle as business use.

In the past, you were required to keep a log book all year, every year. 

That brings us to the new & improved part of the article.¬† You are still required to keep a full 12 month log book to establish a “base year.”¬† Following that full 12 months, you only need to keep a log book for 3 months of the year, referred to as the “sample period.”¬† This sample period will be used as your full year’s useage.

Of course, the government is never truly happy until they’ve thrown a number of twists into something.¬† So, in typical style, here are the exceptions.¬† You can’t use the sample period if:

  • You¬†have not¬†previously filled out and retained a logbook covering a full 12-month period.
  • You have not kept a 3 month sample period logbook for each year since then.
  • The business use of the vehicle changes by more than 10 percent, either up or down.
  • To summarize, it is great to see that the Canada Revenue Agency recognizes that the log book is difficult to keep, and is prepared to make things easier on the small business.¬† Whether or not this will actually encourage more people to keep log books remains to be seen!!

    Filed under: Business tax by David Boese No Comments »




    HST rate increase


    April 6th, 2010

    Well, you can’t say you weren’t warned. ¬†Nova Scotia will be increasing its HST rate, effective July 1, 2010. ¬†Our new HST rate of 15% will mean we have the dubious distinction of one of the highest sales tax rates in Canada.

    Filed under: Business tax, Consumer Tax by David Boese No Comments »




    If you receive a T slip after you have already filed your tax return, don’t just put it aside. ¬†You need to file an adjustment to your tax return to include this missed income. ¬†You can file the adjustment using the T1-ADJ form available on the government’s website, at

    http://www.cra-arc.gc.ca/E/pbg/tf/t1-adj/README.html

    Filed under: Business tax, Personal Tax by David Boese No Comments »




    I don’t typically like the “doom and gloom” style of reporting. ¬†After all, too much gloom tends to grow on a person, right?

    However, here is a gloomy scenario that could play out in Nova Scotia.  First, a quick refresher.  In 2006 the HST rate in Nova Scotia dropped from 15% to 14%, and then dropped again in 2008 down to 13%.  These rate cuts happened after the federal government cut their federal portion of the HST.  Few people complained.

    Now, however, both Nova Scotia and the federal Canadian government are severely in the red. ¬†The provincial NDP government has as good as said that they are going to raise the HST rate. ¬†On February 1, 2010 NDP Finance Minister Steele stated that: ¬†“Over the six public sessions we‚Äôve had, I would say people can accept that part of the solution is an increase in taxes, particularly the HST.” Face it, whenever a Finance Minister says something like that, we can expect a tax increase!

    Over in the federal camp, the Conservatives are dead set against raising taxes. ¬†But the official opposition, the Liberals, are mumbling about increasing the GST/HST back up to what it used to be. ¬†Fortunately the odds are against it, but there’s obviously potential for both the provincial and the federal governments to increase our HST by a couple of percentage points.

    The bottom line is that we may as well expect to be back up to 15% in the next year or two, and let’s hope it doesn’t go past that! ¬†It’s going to be interesting to watch, at the least.

    Filed under: Business tax, Consumer Tax by David Boese 2 Comments »