The procedures included in this update assist Canadian companies in the construction industry in complying with new reporting requirements under the Contract Payment Reporting System.

T5018
A menu procedure from which you can choose one of the following procedures.

T5018S
Prints subcontractor payment information on T5018 slips.

T5018SUM
Displays T5018 slip totals used to complete the T5018 Summary form. (Note: the procedure does not print the information on the form.)

T5018R
Prints a subcontractor payment report. (Current CCRA rules allow you to submit the information in this format if you choose not to print T5018 slips.)

The T5018 Procedures

The T5018 procedures are designed to print T5018 slips or reports as required under the (Canadian) Contract Payment Reporting System. Under this reporting system, construction businesses must report payments they make to subcontractors for construction services.

Who Can Use These Procedures?

In order for the T5018 procedures to determine the total payments made to each subcontractor, you must maintain an individual accounts payable (supplier) account for each subcontractor and have used the “accrual” method to maintain the accounts.

Under the accrual method, subcontractor invoices are recorded as credits to the subcontractor’s payable account and debits to expense accounts (and debits to GST/HST accounts where applicable). Payments made to the subcontractor are recorded as a credit to the bank account and a debit to the subcontractor’s payable account. Under this method, producing T5018 slips is quite easy – the total payments made to a subcontractor is simply the sum of the items on the debit view of the subcontractor’s account that cross to your bank account (or a cash disbursements journal.) The Notes view of the account provides address and business number information.

A procedure attempting to produce T5018 information based on “cash” basis supplier accounting would suffer the following problems:

• It would be error-prone due to variations or misspellings of the subcontractor name from one cheque to another.
• There is nowhere it can reliably obtain the subcontractor’s address and Business or Social Insurance Number. These would have to be typed in manually.

In other words, it would generally be simpler and more accurate to produce the slips and summary manually.

Preparation

Goods vs. Services

T5018 reporting is required for any subcontractor to whom you paid $500 or more for services. If a subcontractor supplied both goods and services, then a reporting is required if the services total $500 or more, and you report the total payment for both goods and services.

This poses a problem for the T5018 procedures because there is no easy way for it to know whether you purchased goods, services, or both from a given subcontractor. This means that in some cases you will need to decide for yourself which subcontractors must be reported. The simplest method of determining this is to:

• Set the dates at the top of your Accounts Payable report to the reporting period you have chosen.
• Set the Type (to the right of the End date) to “D” to display debit amounts.
• You can now use the SORTREPT procedure to sort the accounts by their balance. In this way, you can easily segregate the accounts for which less than $500 is displayed, and for which no T5018 slip is required. (Note: Once you have the information you need, you can use SORTREPT again to put the accounts in alphabetical order by name or description.)
• Scan the list of subcontractors and note the ones that you purchased goods only from. Using /Block Start, /Block End and /Block Move, you can move these accounts out of the group that you will be printing T5018 slips for.
• You may need to examine the ledgers of some of the subcontractors to determine whether payments in the year you are reporting included services totalling $500 or more. Accounts for which payments for services totalled less than $500 can be moved out of the block of accounts you will be printing, as described earlier.

Subcontractor Business Numbers

Before printing T5018 slips or reports, you must ensure that you have obtained, and recorded in your books, the nine-digit Business Number of each subcontractor you do business with. In cases where the subcontractor does not have a Business Number, you must obtain their Social Insurance Number.

The Business or Social Insurance Number is recorded in your books by running the Notes procedure on the subcontractor’s accounts payable account, and typing the number into the “Tax 1”, “Registration #” field. (Only the nine-digit number is required, you do not need to enter the suffix portion of the account number such as “RP0001”.)

Subcontractor Addresses

You are not required to send a copy of the T5018 slip to your subcontractors. CCRA states: “While it is not mandatory, we encourage you to share this information with subcontractors by giving them a copy of the slip.”

If you plan to issue a copy of the T5018 slips to your subcontractors, and you intend to mail them, then you should ensure that you have complete mailing addresses recorded in the Notes of each subcontractor’s account.