Welcome and that you for giving me the opportunity to assist you with your tax question.
Based on the information you have provided, if only one of you is permitted to sign the contract for services with the BC Ministry of Children and Family Development, and the payment is made to that person who signs the contract, you are correct that the person receiving the payment should deposit it into a business account. The payment made to the other person most certainly can be a consult fee which is considered an expense to whoever is making the payment. Of course, the person receiving the consult fee then includes that amount as income into her business account. As I am sure you know, you both should keep detailed records of such an arrangement.
Please let me know if you require further information or clarification.
Thank you and best regards.
Thank you for the response. One final question. At this point I only work part time, and so don't make more than $30,000 and don't have a GST #. I'm assuming this would not change, as even though I am depositing the contract cheque into my business account I am not declaring it as income, just as an expense, correct?
Thank you for your follow-up question. The contract payment is income to your business. However, the fee you pay your associate for her consult fee is an expense. What is left is your income. I.e., you receive payment of $100.00 and you deposit it into your business account. You write a check from your business account to your associate for $50.00. That leaves $50.00 of income to you.
Please let me know if you require further clarification on this.
Thank you and best regards,