Do you need to register for GST or HST?
This week’s video will help you determine if you are a small supplier (and do not need to register) or if registration is required.
It also helps you understand if you might want to register voluntarily.
The CRA number to call is: 1 800 959 5525. In order to expedite the process have a look at this link: https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/rc1.html and be ready to answer all the questions.
If you would like to track your taxes more efficiently consider using QuickBooks Online. If you have any questions you can schedule a call with me here: https://calendly.com/kerry-11/free-introduction or sign up for QuickBooks using this link:https://myquickbookkeeping.com/#plans
Hi, Kerry here from MyQuickBookKeeping. One of the questions I’m often asked is, when do I need to register for GST or HST? You need to register when your sales or billings exceed thirty thousand dollars in the previous year. This is calculated by looking back at the last four quarters, so what does that mean?
We look at the preceding four quarters to determine what your income was. What was your business income for the most recent three months? And the three months preceding that, and again, and again? If that number is below thirty thousand dollars, you’re are still considered a small supplier, if it’s over thirty thousand dollars you’re no longer a small supplier, you need to register for GST or HST and start collecting tax after thirty days. When you’ve exceeded thirty thousand dollars of income in the preceding four quarters you would still be considered a small supplier in that next month.
So, in our example for January, you would need to be registered and collecting sales tax come February. All of your regular sales that would be subject to GST or HST, are included in this calculation.
Registration is very easy; phone Canada Revenue Agency (I’ve put the phone number down below), answer a few questions and they’ll give you GST or HST number right there on the spot.
Now, even if you’re not required to register you may still want to do so voluntarily. The two main things to consider are:
1. Do I have expenses I pay HST or GST on? If the answer is yes, by registering you’ll be able to claim credits for the GST or HST you pay and receive it back from CRA.
2. Secondly, Would my customers or clients be able to claim back the HST or GST I charge them? If not, then you’ll be increasing the cost of your products or services by at least 5%. You may not want to do that. If your customers or clients can claim back any GST or HST they pay you, that may make sense to register and claim any credits you pay.
Keep in mind that if you do register, you have an obligation to collect the taxes and remit them when they’re due. You’ll need to keep accurate records, so you can file your returns in a timely manner.
If you’re the sort of person whose records consist of a shoebox full of receipts, voluntary registration might not be the best idea! Or you can just reach out to me, we’ll get you set up on QuickBooks. All of your GST will be calculated automatically! There’s a link below, you can sign up for a free consultation any time.
Now note, this information is for your reference only. It would be a good idea to talk to your accountant, who’s familiar with your business. Depending upon where you operate, and where you sell your products to, different tax rates can apply to different transactions and you’ll get advice specific for your business. Let me know if you have any questions.
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