How to Pay the CRA if Your Business Account is Frozen

If you find yourself in the difficult situation where the Canada Revenue Agency (CRA) has frozen your business bank account, it can feel like an impossible hurdle.

But don’t worry – you still have several options for settling your tax debt, even if your primary business account is temporarily inaccessible. Here’s how you can keep your business on track and resolve the issue quickly.

Why Accounts Get Frozen by the CRA

First, it’s important to understand why the CRA might freeze a business account. This typically happens when a business has outstanding tax debts or has failed to comply with payment arrangements.

Remember: The CRA has broad powers to collect taxes owed, including the ability to issue a Requirement to Pay (RTP) notice to your financial institution, effectively freezing your account.

How to Pay the CRA if Your Account is Frozen

Here are some practical ways to pay your tax debt even if your business account is frozen:

1. Use an Alternate Bank Account

• Personal Accounts: If you’re a sole proprietor, you might be able to use a personal bank account to make the payment.
• Separate Business Accounts: If your business has multiple accounts, use one that is not currently frozen.
• Third-Party Accounts: Directors, partners, or investors may be able to assist by making the payment from their personal or business accounts.

2. Use Online Payment Methods

• CRA My Business Account (MyBA): You can still make a payment through the CRA’s online portal using a credit card, debit card, or PayPal via services like Plastiq.
• Pre-Authorized Debit (PAD): Set up a PAD agreement from an unfrozen account to make the payment directly to the CRA.
• E-Transfer or Wire Transfer: Some banks allow direct transfers to the CRA, bypassing your frozen account.

3. Use CRA-Approved Third-Party Services

• Canada Post MyMoney: Make payments in cash or debit at participating Canada Post locations.
• Western Union or PaySimply: Use these services for online or in-person payments to the CRA.

4. Certified Cheque or Bank Draft

• Send a certified cheque, bank draft, or money order directly to the CRA by mail. Be sure to include your business number and the specific tax type (e.g., GST/HST, payroll) to ensure accurate processing.

5. Negotiate with the CRA

• Set Up a Payment Arrangement: Contact the CRA Collections Department to arrange a manageable payment plan.
• Apply for Taxpayer Relief: If you can demonstrate financial hardship, you may be eligible for reduced penalties and interest.

6. Resolve the Account Freeze

• Communicate with the CRA: Understand the exact reason for the freeze and the steps required to lift it.
• Make a Partial Payment: In some cases, a partial payment can be enough to convince the CRA to release the freeze.
• Provide Financial Disclosure: If your business is in severe financial distress, the CRA may be willing to negotiate a reduced payment plan.

7. Consider Short-Term Financing

• If you need immediate funds, consider a short-term loan, line of credit, or even a personal loan to cover the outstanding tax debt and unlock your business account.

8. Seek Professional Help

• Tax Professionals or Lawyers: Engage a tax professional or lawyer who specializes in CRA collections to negotiate on your behalf and potentially reduce your liability.

While a frozen account can be a serious setback, it’s not the end of the road for your business. With the right strategy and support, you can resolve the issue, pay off your debt, and get back to business as usual.

If you’re facing this situation, don’t hesitate to act quickly – the sooner you resolve the freeze, the sooner you can restore your business’s financial health.