Things To Know About Filing GST/HST

Things To Know About Filing GST/HST

As a small business operating in Canada, you are required to charge GST/HST on your products or services if you bill more than $30,000 a year.  Even if you operate below the $30,000 threshold, business owners still have the option to register a GST/HST account anyway.  Once you register for GST/HST account, you must then complete an HST filing to remit the amount collected to the Canada Revenue Agency (CRA).

Without the assistance of a bookkeeper or other financial support, it can be overwhelming for business owners to decide the best way to manage their HST return.  When it comes to HST filing, you need to know how frequently you want to file and as well as how to calculate your net tax and input tax credits.

Making the Right Choice for Your Business When Managing Your HST Filing

When it comes to deciding on the right course of action for an HST return, business owners should consider the following information.

Taking Advantage of Input Tax Credits

As mentioned above, even those businesses that are considered small supplies can still choose to collect HST.  After all, every single business owner will be paying GST/HST on the taxable goods and services used to run and grow your business. So if you are a GST/HST registrant, you will be able to recover some of the GST/HST you paid out on business purchases through input tax credits.

If you don’t register for a GST/HST account, you will have no way of getting back any of the GST/HST you paid. For most small businesses, the amount of GST/HST paid to acquire supplies and services over the course of a year is considerable, so GST/HST registration makes economic sense.

How Often Should You File?

When you register for a GST/HST business account in Canada, the CRA will provide you with a reporting period based on your total or estimated annual sales. The frequency of the reporting period could be monthly, quarterly, or annually. Keep in mind that if you are filing annually, it is best to plan ahead for the amount you may owe instead of being stuck with a sizeable return that you are unprepared to pay.

If you are a new business starting out, you may be able to choose how often you want your reporting period to be. For businesses that have been operating for a while, you may be able to choose a different optional reporting period, depending on what your total sales figures are.

It is important to know that you still need to complete your HST return according to your reporting period even if you haven’t collected any GST/HST during that time. For each reporting period, you have to show the amount of GST/HST you collected from your clients, as well as the amount of GST/HST you paid or owe your suppliers. The difference between the two is your net tax – the amount that has to be remitted to the CRA.

Find the Support of a Professional Bookkeeper

In reality, filing your HST can be a bit more complicated than we’ve described. With input tax credits, different classes of GST/HST goods and services and GST/HST exemptions, it can be very time consuming and stressful for business owners to properly remit their HST returns on their own.

Bookkeeping for GTA offers Toronto area business owners support and expertise when it comes to HST remittance. Our professional bookkeepers can take care of compiling and organizing all the required HST information so that you have one less thing to worry about.  Contact us to find out more about how we can help.