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INJURYwise

Working under the table

They say there are only two things that are certain in life: death and taxes. Not exactly an uplifting thought, but true nonetheless. Some people try to avoid paying tax by “working under the table,” also referred to as “moonlighting” or working “off the books” but the reality is that this practice can eventually kick you in the backside, something I see all too often in my personal injury practice.

The obvious problem with working under the table is that it is illegal. It can result in criminal convictions, fines, jail time and penalties (for more information see: CRA – About the underground economy). Clearly if you work under the table you are not expecting to get caught, but some people do and CRA (Canada Revenue Agency) appears to have very little mercy.

I have never met anyone who anticipated being seriously injured in an accident, rendering them unable to work; so not surprisingly, most people have not thought about the fact that if their primary income is earned under the table or is unreported and they are injured in an accident, they will not have a typical claim for income loss.

Where your income is earned under the table or is unreported, you can still make a claim for income loss, but if you do, it comes with inherent risk of CRA knocking on your door for back taxes. You will also not qualify for Employment Insurance or wage loss benefits with ICBC, you will have no workers compensation coverage and you are going to have a much more difficult time claiming any past or future wage loss in an accident claim. As a result, if you can’t work for any real length of time, chances are you will lose everything you have worked so hard under the table for, because you won’t have any replacement income. Unless you have significant savings or access to other income, you won’t be able to pay your mortgage, or your rent, or any of your bills while you are recovering from your injuries.

The other problem is that in addition to not being able to make a proper wage loss claim, it can impact your credibility and reliability of your evidence with respect to your injury claim. Like it or not, we have to pay taxes. If you avoid paying taxes, the court (and ICBC) will hold that against you in all aspects of your claim. If you have been injured in an accident, and you have been working under the table, you may want to speak to a tax lawyer about CRA’s Voluntary Disclosure Program, which is an opportunity to put you in good standing with CRA and possibly help improve your injury claim.

 

*Important Note: The information contained in this column should not be treated by readers as legal advice and should not be relied on without detailed legal counsel being sought.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.



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About the Author

Keri Grenier is an experienced personal injury lawyer based at Murphy Battista LLP's Kelowna office. She also holds a B.A. in psychology. Her practice focuses on helping people who have been injured in motor vehicle accidents or due to the negligence of others.

In her column, Keri provides practical information about personal injury claims in a format that is simple and easy to understand.

Email: [email protected]

Website: http://www.murphybattista.com
 

Twitter:  http://twitter.com/KelownaLawyer



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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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