Here are some of the most common myths about starting a small business in Canada.
Myth 1 – Starting a small business will let me write off all my expenses.
You’ll never be able to “write off” all of your expenses. Some things don’t qualify as a business expense, and in some cases you can only claim a portion of the expense or claim if a particular circumstance applies.
Myth 2 – I don’t have to register my business if it’s small.
Registering your business is a requirement when you’re starting a small business in Canada; it has nothing to do with the size of your business.
Myth 3 – If I’m not selling much it doesn’t count as a ‘real’ business.
Like Myth 2, this idea is based on the belief that the size of your small business matters. Whether you sell a lot or not, the government expects you to declare the income and follow the regulations that a legitimate business must follow.
Myth 4 – I don’t have to charge and remit taxes if I’m selling online.
Just like a business with a storefront, you’re responsible for collecting and remitting GST/HST if you’re selling GST/HST taxable products or services over the internet.
Myth 5 – There are lots of tax breaks for people who start home-based businesses.
Home-based business owners can claim some of their expenses; however they can only claim a portion of these expenses based on business use.
Myth 6 – There are lots of government grants for people starting small businesses.
Government grants are rare, and the few that do exist are for specific groups or regions.
In reality, the independence and satisfaction of turning an idea into a successful business is very rewarding.