Entrepreneurship & Small Business

Ask me your GST/HST (and maybe PST and QST) questions!

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  • Jun 23rd, 2017 8:39 am
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[OP]
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Dec 22, 2004
1973 posts
12 upvotes

Ask me your GST/HST (and maybe PST and QST) questions!

I'm currently employed as a tax advisor specializing in sales taxes. If you have any GST/HST questions, ask away.

Disclaimer:

This thread was created for general guidance on matters of interest only, and does not constitute legal or professional advice. You should not act upon the information contained in this thread without obtaining specific advice from a tax professional. No representation or warranty (expressed or implied) is given as to the accuracy or completeness of the information contained in this thread, and I do not accept or assume any liability, responsibility, or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this thread or for any decision based on it.
121 replies
Newbie
Dec 28, 2013
6 posts
For an IT contractor, generally speaking, does it make more sense to use the simplified method for calculating HST remittance?
Stop! Hammer time!
[OP]
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Dec 22, 2004
1973 posts
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Generally, yes; you'll likely end up making money. However, in my experience, most IT contractors aren't really contractors. But that's a different topic for another day.
Newbie
Jun 9, 2009
89 posts
8 upvotes
Ottawa
My sister is a RMT and she's currently working with a clinic on a 70/30 split. However, when the clinic charges the client she treats for the full amount plus tax, they have her remit 100% of HST instead of the 70% she actually gets. Is this correct? Does this even matter?
[OP]
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Dec 22, 2004
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shrod123 wrote:
Jan 4th, 2014 7:39 am
My sister is a RMT and she's currently working with a clinic on a 70/30 split. However, when the clinic charges the client she treats for the full amount plus tax, they have her remit 100% of HST instead of the 70% she actually gets. Is this correct? Does this even matter?
It depends. If the clinic is collecting GST/HST on her behalf as her agent, she needs to remit 100%, unless she has entered into an election with the clinic that allows the clinic to remit on her behalf. If, however, she is providing a service to the clinic and her fee for that service is 70% of the fee charged by the clinic to individuals for massages, she may be over-remitting and the clinic could be under-remitting. It all depends on the nature of the supplies being made in these circumstances.

It seems that your sister isn't at risk here by remitting 100% of the HST. If there is a risk here, it lies with the clinic.
Newbie
Jan 8, 2014
4 posts
Vancouver
Small supplier status but realize that my entire client base is B2B so GST won't really be an objection. Is there any disadvantage in my case to getting a HST number?
[OP]
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Dec 22, 2004
1973 posts
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phonebillninja wrote:
Jan 11th, 2014 3:23 am
Small supplier status but realize that my entire client base is B2B so GST won't really be an objection. Is there any disadvantage in my case to getting a HST number?
The main disadvantage would be on the bookkeeping side of things. You would need to file a GST/HST return, track the GST/HST you pay, etc. You might make things easier by electing to use the "quick method" to account for the GST/HST.
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Oct 15, 2008
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Victoria
I have am employed full-time, but I also have a side business (sole proprietorship) which makes well under $30,000 annually. Do I need to collect tax? Should I collect tax?

I have have very few expenses in terms of running the business, but I may want to purchase a new computer and vehicle next year.

TIA batman321123!
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Feb 1, 2006
9236 posts
334 upvotes
cooper83 wrote:
Jan 14th, 2014 10:07 pm
I have am employed full-time, but I also have a side business (sole proprietorship) which makes well under $30,000 annually. Do I need to collect tax? Should I collect tax?

I have have very few expenses in terms of running the business, but I may want to purchase a new computer and vehicle next year.

TIA batman321123!
By electing to not register for HST, you're missing out on recovering the full HST portion of any expenses you incur. You can still claim the full expense, HST included, as a business cost, but that only gets you back part of the HST (at your marginal tax rate), not 100%. If your expenses are minimal, maybe not a big deal, as the upside is that you don't have the hassle of tracking and remitting HST. But for big expenses, I'd want that HST back 100%, myself!
[OP]
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Dec 22, 2004
1973 posts
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cooper83 wrote:
Jan 14th, 2014 10:07 pm
I have am employed full-time, but I also have a side business (sole proprietorship) which makes well under $30,000 annually. Do I need to collect tax? Should I collect tax?

I have have very few expenses in terms of running the business, but I may want to purchase a new computer and vehicle next year.

TIA batman321123!
If your annual sales are > $30k, you generally will not be required to register for GST/HST and charge GST/HST. You should not charge and collect GST/HST unless you register or unless your sales exceed $30k over 4 consecutive quarters.

If you want, look into the Quick Method of accounting for GST/HST and see if it is beneficial for you to register for GST/HST. Also, you cannot recover the full amount of GST/HST you pay on vehicle. For one, you need to prorate your use of the items between personal use and business use. Secondly, you can only claim GST/HST on the CCA portion, not on the full amount of tax paid. Also, if your business use is <10% of total use, you cannot recover any HST payable. This only applies to sole props.

For other capital property (e.g., the computer), if business use is >50% of total use, you can claim all of the HST back. If business use is <=50%, you can't recover any HST.

Also, like Bullseye said, if you register, you will have the administrative hassle of charging and collecting GST/HST and keeping track of that. Further, if your customers cannot recover the GST/HST you charge them, you've effectively upped your prices.

Sorry about the late reply.
Newbie
Feb 8, 2009
70 posts
18 upvotes
part-time small supplier here (no HST registration). A commercial contract came up and they are requesting that I provide them with an HST number and charge them HST. I mentioned that this is a part-time side business and I am not legally required (under 30k) to charge, but they said they need anyways. I'll probably register as I'd like the contract, and I realize all my future clients will now need to pay HST -- however, my question is why would certain commercial contracts need the number?

thanks
[OP]
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Dec 22, 2004
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mw83krk wrote:
Jan 31st, 2014 1:12 pm
part-time small supplier here (no HST registration). A commercial contract came up and they are requesting that I provide them with an HST number and charge them HST. I mentioned that this is a part-time side business and I am not legally required (under 30k) to charge, but they said they need anyways. I'll probably register as I'd like the contract, and I realize all my future clients will now need to pay HST -- however, my question is why would certain commercial contracts need the number?

thanks
Ignorance. I can't think of a reason why someone would only deal with a GST/HST registrant.
Member
Mar 3, 2010
211 posts
18 upvotes
Need help with GST: I have two company A and B, I want to close company A still have 40000 GST payable, So could I simply transfer those amount from company A to company B? like company B invoice all the GST payment
Member
User avatar
Nov 10, 2009
427 posts
29 upvotes
Hamilton
Because they want the HST credit to lower the amount they remit back to the government.

I remember when the GST firs started, and this same scenario happened where companies wouldn't deal with you if you weren't registered for GST/HST.

mw83krk wrote:
Jan 31st, 2014 1:12 pm
part-time small supplier here (no HST registration). A commercial contract came up and they are requesting that I provide them with an HST number and charge them HST. I mentioned that this is a part-time side business and I am not legally required (under 30k) to charge, but they said they need anyways. I'll probably register as I'd like the contract, and I realize all my future clients will now need to pay HST -- however, my question is why would certain commercial contracts need the number?

thanks
Member
User avatar
Nov 10, 2009
427 posts
29 upvotes
Hamilton
That will confuse them.. Why don't you transfer money from co B to A and then pay the GST.

leidreamer wrote:
Feb 4th, 2014 12:12 pm
Need help with GST: I have two company A and B, I want to close company A still have 40000 GST payable, So could I simply transfer those amount from company A to company B? like company B invoice all the GST payment

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