No More Paper Refund Cheques?

With a target date of April 2016, CRA is moving closer to the elimination of cheques and manual payments and towards full electronic banking for businesses.

Businesses can start considering a few of the options that will best suit their banking needs.

Electronic Banking - Businesses are now able to manage payments and refunds with Canada Revenue Agency electronically through the “Represent a Business” portal however certain levels of authorization must be in place to access the options.

Direct Deposit – CRA will now provide direct deposit of refunds into the business bank account.  While this option has been available to individuals for some time, it is only this year that CRA has made the option available to business across all the programs that CRA administers.

Pre-Authorized Debit  (PAD) – Business now has the option to set up pre-authorized payments in order to remit balances due, instalment and arrear payments all fully within the control of the business owner.  PAD agreements are initiated by the business and can be stopped by the business directly through the portal.

With Electronic Banking also comes the opportunity for increased fraud.  In order to ensure that the individual making transactions on behalf of the business is in fact authorized to do so, CRA has implemented Form RC321 – Delegation of Authority. This additional level of authorization is required to allow the corporate taxpayer's representative to access all information on-line through CRA’s “Represent a Business” portal.

RC321 creates a “Level 3 authority” under the Represent a Business program which then allows the designate to act on behalf of the business in a greater capacity.  This now creates three levels of authorization.  In general;

• Level 1 – Allows on-line access to information and the ability to request certain information but does not allow the Representative to actually transact on behalf of the client.
• Level 2 – Allows Level 1 on-line access plus the ability to transact on behalf of the client, transfer payments between BN accounts and file Objections on behalf of the client.  Both Level 1 and 2 require a valid RC59 on file with CRA and for the Representative to be registered with a Rep ID.
• Level 3 – Allows all the previous options along with a couple of additional benefits.  Level 3 Delegates will now also be able to:
  • Manage and/or Authorize Representatives for Level 1 and 2
  • Manage Direct Deposit authorizations on behalf of the client

The Business Owner cannot delegate;

• Pre-Authorized Debits
• Changes to the business profile

It is important to note that for a Delegation of Authority to be put in place, the Representative must first be registered with CRA and obtain a RepID.   The full listing of the level of authorization required to transact certain aspects of the business dealing with CRA is available on the CRA website.