Missed a personal tax instalment: interest, penalties and the next payment

Confirm whether instalments were required

Read the relevant CRA reminder and the current eligibility and calculation rules. A reminder, the amount you actually owe and the calculation method need to be considered together. Ask the preparer to explain the requirement if the facts have changed.

CRA describes interest and possible penalties for required instalments that are paid late or in insufficient amounts. Instalment interest is compounded daily at a prescribed rate that can change quarterly. Do not estimate every year's charge using a fixed rate copied from an old article.

Reconstruct the payment record

• List the required instalment dates and the calculation used.
• Find each payment date, amount and reference.
• Check the account to which the payment was applied.
• Identify any difference between the plan and the posted record.
• Keep questions for the preparer in one place.

This review can help explain a charge, but a calendar note alone cannot establish the correct instalment amount or assessment.

Keep the next payment separate from the annual filing

Finishing the annual return does not prove every instalment was made when required. Review the next scheduled obligation rather than waiting for another year-end appointment to discover an unresolved payment.

Use the sole-proprietor calendar carefully

Enable personal instalments in Compliance Calendar when they apply, and compare its dates with the actual CRA instructions. Keep the payment reference against the relevant task. The calendar does not determine eligibility, choose the calculation method or calculate instalment interest. Special situations need a separate review.