I recently left my last job, where I was a self-employed, commissioned sales person. When I terminated the contract, I owed the business for deductions that had been made but for which there were insufficient commissions to cover the deductions. For example, a technology fee for access to a laptop, industry licensing fees and insurance, etc. These were deducted from my commission account and, had there been commissions to cover (the reasons there weren’t is irrelevant here but is one aspect of why I have since decided to move on) would have covered the deductions.
I left last October, but didn’t get a final bill for the amount owing until January. When I received my T4A in February, the debt I owed to them, which was paid off earlier this year, was included along with a small amount of taxable income.
At no point was I advanced any commissions. They simply allowed my commission account to be drawn into the negative. But they are claiming that these deductions, which they allowed to stand until I paid them back, are income. At best, I could see them claim it as a taxable benefit because they essentially gave me an interest free loan, but at no point did I receive any income to offset these deductions, regardless of what their accountants might consider in terms of debits and credits on an internal account.
For lack of a better example, it’s like I missed rent on an apartment in November and December but caught up in January, but my landlord issued me tax slips for income in the amount of the missed rent because “he had covered it for me”. I don’t think any reasonable person would consider that income.
I am in the middle of trying to contact an accountant and get through to CRA to try and figure out whether I am out to lunch on this or how I should proceed, but I’m wondering if anyone here has any clue at all and can give me unofficial/informal information or advice.