preview

Wiebe Doors Case Summary

Decent Essays

1) In order to begin considering Bryan’s income for 2011, the first thing we need to determine is whether he is employed or self employed as an independent contractor. The courts distinguish between an employee, defined in s.248(1) of the Income Tax Act, hereafter, ITA, as the “position of an individual in the service of some other person”. An independent contractor, is someone with a “contract for service.” The case that considered an employee versus and independent contractor was Wiebe Door Service Ltd. v M.N.R. In this case, the applicant owned a door instalment business and had a number of contractors that worked for them. The contractors were responsible for their own taxes, workers compensation and unemployment insurance. However …show more content…

(Connor Homes) v Canada, 2013. The appellant had hired individuals as independent contractors and had them sign contracts to that effect. However, upon the evidence of the case, the FCA found that the workers were employees, rather then independent contractors. The test in Wiebe Doors was applied but the court felt the proper test was a 2-Step test. Under the first step, there is the subjective element that looks at the intent of each party, to be employed or be a contractor. The second step concerns objective reality and the factors considered in Wiebe Doors. Applying this recent test, it would still appear Bryan is an …show more content…

He sought to deduct various expenses associated with maintaining the office including electricity, gas, repairs and maintenance. These expenses were allowed under s.8(1)(i)(ii) as office rent, but the court did not see them as “supplies” that were “consumed.” However despite this decision, the CRA regards these items as supplies and allows them to be deductible under s.8(1)(i)(iii) ITA. According to CRA Bulletin, paragraphs 9 and 10, supplies in para 8(1)(i)(iii) do not include basic monthly service charge for a telephone line, however, in cases that followed, Prewer v MNR, the taxpayer was able to deduct a percentage of her house, but it had to be reasonable otherwise it would fall under s.67 ITA. The court reconsidered this position in Felton v MNR and said that if you own the home, then you cant deduct rent because “rent” can only arise in a and lord-tenant relationship and here one does not exist. In Haltrecht v Canada, the minister would not allow the deduction of utilities and maintenance costs of the house but in the CRA Interpretation bulletin IT-352R2, they said that they would allow deduction under s.8(1)(i)(ii) they would allow a reasonable deduction of expenses paid by the taxpayer which would include, maintenance of home including, fuel, electricity, light bulbs, cleaning materials and minor

Get Access