Skilled trades tax services: vehicles, tools, apprentices, and clean HST

Vehicles: a service van is usually not a passenger vehicle

Classification decides the tax treatment, and it usually favours you. A cargo van racked out with parts and equipment is a motor vehicle: it goes into Class 10 at 30% CCA with no cost ceiling and a full input tax credit on purchase. A crew-cab pickup that also does school runs can be a passenger vehicle, where CCA and input tax credits are capped regardless of what you paid. Configuration and actual use decide the category, so we document both when the vehicle is bought, not when CRA asks.

Personal use of a company vehicle creates a taxable benefit for the driver, and techs taking vans home is a standard audit question in the trades. A written take-home policy, a mileage record, and one consistent treatment of home-to-first-call travel keep the benefit small and defensible.

Tools and equipment: the $500 line does the work

Where a purchase lands depends mostly on its price, and the difference is a full write-off now versus 20% a year:

That last row is easy to miss. The tradesperson tools deduction lets an employee deduct up to $1,000 of new tool costs above an indexed threshold each year, but only when the employer certifies the tools were a condition of employment — a certification we prepare alongside your T4s so your techs get the claim without chasing paperwork in April.

The apprenticeship credit that still exists — and the one that does not

The federal Apprenticeship Job Creation Tax Credit is alive: 10% of wages paid to an apprentice in the first two years of a Red Seal trade program, up to $2,000 per apprentice per year, claimed as an investment tax credit on the T2. A shop running three first-year apprentices leaves $6,000 behind by not claiming it, and unused amounts carry back three years and forward twenty.

Ontario is the opposite story: the provincial apprenticeship training tax credit was eliminated for apprentices who registered after November 14, 2017, so it should no longer appear in any projection. Wage subsidies and grant programs outside the tax system open and close constantly — we check what is actually live for your trade at each year-end rather than assuming.

HST on service versus materials: one supply, one rate

Supply-and-install work is a single taxable supply, so HST applies to the whole contract price — labour, materials, and markup together — at 13% in Ontario. You then recover the HST paid at the wholesaler through input tax credits, which means marking up materials never creates double tax. Charging HST on the labour line only, as some shops do, creates an audit problem instead of a saving.

Watch the edges of that rule. Quoting homeowners a tax-included flat price is fine, but the HST must be backed out and remitted from it. Residential customers absorb the full 13%, which is exactly why CRA runs underground economy projects on the trades — the paper trail protects you. On commercial work, expect T5018 slips from general contractors reporting what they paid you; CRA matches them to your filed revenue, so the books have to agree before the return goes in.

Where the US enters: parts, equipment, warranty calls

US-sourced equipment and parts arrive with HST at the border, duty questions under CUSMA origin rules, and paperwork that decides whether the border tax comes back as an input tax credit. The occasional US warranty or contract job adds income sourcing on top. Those questions get full treatment in our cross-border tax guide for skilled trades; on the Canadian return, we make sure import HST and any US income land where they belong.