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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Deal Addict
Feb 5, 2010
2765 posts
173 upvotes
I am a sole prop. Let's say that I incur $2000 of travel expenses for a trip to Asia. None of it includes HST (as they were all incurred in Asia).

The client is going to reimburse for these expenses. I am also using the quick method so ITC implications.

When invoicing for these expenses, do I:

1) Just invoice for $2000 as a flat dollar reimburseable expense, in other words, no HST on top
2) Invoice for $2000 + HST (I wouldn't be surprised if the client paid the HST on this)
3) Something else?

Thanks!
Newbie
Feb 23, 2009
31 posts
6 upvotes
Victoria
poooofy2 wrote:
May 28th, 2014 11:41 pm
Is only the hst I can claim if I show I am leasing a commercial vehicle 100% of the time.
You claim the HST as an ITC on any passenger vehicle monthly lease payment restricted to $800.
Newbie
Feb 23, 2009
31 posts
6 upvotes
Victoria
Abel4Life wrote:
Jun 4th, 2014 6:56 pm
I am a sole prop. Let's say that I incur $2000 of travel expenses for a trip to Asia. None of it includes HST (as they were all incurred in Asia).

The client is going to reimburse for these expenses. I am also using the quick method so ITC implications.

When invoicing for these expenses, do I:

1) Just invoice for $2000 as a flat dollar reimburseable expense, in other words, no HST on top
2) Invoice for $2000 + HST (I wouldn't be surprised if the client paid the HST on this)
3) Something else?

Thanks!
I used to do foreign consulting - you don't charge GST/HST - well technically you do at zero percent as it is zero rated. But why don't you want a profit margin for your service? If you're just billing for your costs, how are you making any money with no markup or profit margin on your selling price to cover your cost of time or overhead?
Newbie
Feb 23, 2009
31 posts
6 upvotes
Victoria
cklutz wrote:
Jun 1st, 2014 10:57 am
Hello,

I have a part-time photography business that is registered for HST. I am in Ontario. If someone in Alberta orders a print and I mail it to them, should I charge them the Ontario HST (13%) or the Alberta rate (5% since they don't pay GST)?

Thanks!
Simon
Sorry to ring in on the guy's thread. But place of supply rules say you charge 5% GST. Think of it this way - anytime you order something from a Canadian retailer like amazon.ca, they charge the GST/HST rate based on were you live, not where they are located. Hence, place of supply.
Sr. Member
Aug 8, 2010
626 posts
506 upvotes
GTA
I can use some help/Advice.

1.
I have a new sole prop business, as of now I have not been charging HST.
I am still well below the 30k, But now I am selling products that I am paying HST for to my vendors, so if I don't charge HST I will lose money, Correct? (I know I can mark up my prices to include the HST, but that would make my prices seem higher)

2.
Once I register for a HST account, am I supposed to be paying the HST to CRA once a year or is it more often during the year?
Can I do this myself, or does my accountant have to do this?

3.
I am assuming that with a HST # I will also need a business bank account ? as of now Im using my personal bank acct (My business name is not my personal name)

4.
Does having a HST# make more work for my Accountant? Aka: Is my accountant going to charge me more than what he already charges me?

Thanks a lot!
[OP]
Deal Addict
User avatar
Dec 22, 2004
1973 posts
12 upvotes
Lifted, thanks for jumping in while I was gone AWOL!
poooofy2 wrote:
May 28th, 2014 11:41 pm
Is only the hst I can claim if I show I am leasing a commercial vehicle 100% of the time.
I'm not sure what this means...
cklutz wrote:
Jun 1st, 2014 10:57 am
Hello,

I have a part-time photography business that is registered for HST. I am in Ontario. If someone in Alberta orders a print and I mail it to them, should I charge them the Ontario HST (13%) or the Alberta rate (5% since they don't pay GST)?

Thanks!
Simon
If you're mailing prints to Alberta, you should charge 5% GST, as the supply is made where the property is delivered (AB).
Abel4Life wrote:
Jun 4th, 2014 6:56 pm
I am a sole prop. Let's say that I incur $2000 of travel expenses for a trip to Asia. None of it includes HST (as they were all incurred in Asia).

The client is going to reimburse for these expenses. I am also using the quick method so ITC implications.

When invoicing for these expenses, do I:

1) Just invoice for $2000 as a flat dollar reimburseable expense, in other words, no HST on top
2) Invoice for $2000 + HST (I wouldn't be surprised if the client paid the HST on this)
3) Something else?

Thanks!
I assume that your client is in Canada.

I would generally recommend invoicing $2,000 + GST/HST. The expenses you incurred are inputs into your business. Therefore, to the extent GST/HST was payable on your inputs, you would be entitled to claim an ITC. The fact that you separate out an input for reimbursement does not mean that your client should not pay GST/HST on those separately identified charges.

Generally, you would not charge GST/HST on reimbursed expenses when you incur those expenses as agent for another person. I doubt you incurred the expense of going to Asia as agent for your client.
vermit25 wrote:
Jun 5th, 2014 12:51 pm
I can use some help/Advice.

1.
I have a new sole prop business, as of now I have not been charging HST.
I am still well below the 30k, But now I am selling products that I am paying HST for to my vendors, so if I don't charge HST I will lose money, Correct? (I know I can mark up my prices to include the HST, but that would make my prices seem higher)

2.
Once I register for a HST account, am I supposed to be paying the HST to CRA once a year or is it more often during the year?
Can I do this myself, or does my accountant have to do this?

3.
I am assuming that with a HST # I will also need a business bank account ? as of now Im using my personal bank acct (My business name is not my personal name)

4.
Does having a HST# make more work for my Accountant? Aka: Is my accountant going to charge me more than what he already charges me?

Thanks a lot!
1. If you don't register for GST/HST and charge GST/HST to your patrons, you will lose money in the sense that you will not be entitled to claim input tax credits (ITCs) for GST/HST that you pay on your expenses.

2. This will depend on your filing frequency. If you have less than $1.5 million in annual taxable supplies, you generally will be an annual GST/HST return filer. You may need to make instalment payments on a quarterly basis if your net tax (GST/HST Collected less ITCs) in the prior year was greater than $3,000.

You can file this return on your own. It doesn't need to be done by the accountant and it is relatively straightforward. The only information you need is: a) taxable revenues during the year, b) GST/HST collected during the year, and c) GST/HST paid during the year (i.e., ITCs claimed).

3. You will not need a separate bank account. Just ensure your accounting records are good and you can easily identify the GST/HST you collected and the GST/HST you paid.

4. If you complete the GST/HST return on your own, it won't increase your accountant's workload. I can't see the accountant's workload increasing significantly even if you don't complete the return on your own, so long as the accountant can easily determine the amount of GST/HST collected and GST/HST paid.
Sr. Member
Aug 8, 2010
626 posts
506 upvotes
GTA
Thanks for the detailed reply Batman.

Regarding:
batman321123 wrote:
Jun 6th, 2014 12:15 am
3. You will not need a separate bank account. Just ensure your accounting records are good and you can easily identify the GST/HST you collected and the GST/HST you paid.
If I use a regular checking account (PC for example), will I be able to accept payments in my business name?

I know this is not really related to GST/HST, but was wondering if you or someone else can help.
[OP]
Deal Addict
User avatar
Dec 22, 2004
1973 posts
12 upvotes
vermit25 wrote:
Jun 6th, 2014 9:34 am
Thanks for the detailed reply Batman.

Regarding:


If I use a regular checking account (PC for example), will I be able to accept payments in my business name?

I know this is not really related to GST/HST, but was wondering if you or someone else can help.
No idea. Best to check with your bank.
Sr. Member
Aug 8, 2010
626 posts
506 upvotes
GTA
What is my best method to pay my HST online?
I do not have a business bank account.
Deal Addict
Jun 9, 2003
4429 posts
572 upvotes
I started freelancing in 2014. Unfortunately I didn't do my homework I guess and didn't realize that I had to opt-in for the quick method of accounting. So based on what I've read, it's too late to elect for the 2014 tax year and also too late to elect for the 2015 tax year (I am an annual filer, this would be my first filing). Since I'm an IT (software development) consultant, my expenses are relatively low. I guess I've really screwed myself? Any options other than to eat the increased remittance amount?

UPDATE: So after calming down from my panic, I called up CRA just to see if I had understood things correctly. It was nicely explained to me that I could still make the election, since I had not made an election either way yet. I could do it online and it would let me know right away. What a relief that my election to use the quick method from my business' start date was approved. Crisis averted ;)
Deal Expert
User avatar
Apr 21, 2004
38084 posts
8227 upvotes
Hey Batman,

How can consumers check that people charging HST (on ebay or online) have in fact registered with the CRA to collect taxes on goods and services sold?

Many thanks in advance.
Deal Addict
Sep 1, 2005
1644 posts
320 upvotes
Vancouver
alanbrenton wrote:
May 1st, 2015 12:25 pm
Hey Batman,

How can consumers check that people charging HST (on ebay or online) have in fact registered with the CRA to collect taxes on goods and services sold?

Many thanks in advance.
There is a CRA tool to use - http://www.cra-arc.gc.ca/gsthstregistry/

do need to know the business name though (that may differ from its operating name)

Invoices of registrants are required to have the busines number on it
Deal Addict
Dec 21, 2012
1933 posts
292 upvotes
1. Is it possible to open a business account with an BN? My company earns less than $30,000 so I am not required to register it, but every account I've looked at asks for a BN. If yes, please point me towards the correct accounts (I am assuming I can use my business name instead of my personal name when making purchases).

2. Can I still charge customers GST/HST without a GST/HST#, seeing that I am well below the $30,000 mark?

3. What is the current process and fees associated with a) registering your business and b) getting a BN/GST & HST#?

Thanks.
Deal Fanatic
User avatar
Nov 19, 2004
7107 posts
893 upvotes
Cambridge, ON
AFG786 wrote:
May 9th, 2015 8:12 pm
1. Is it possible to open a business account with an BN? My company earns less than $30,000 so I am not required to register it, but every account I've looked at asks for a BN. If yes, please point me towards the correct accounts (I am assuming I can use my business name instead of my personal name when making purchases).

2. Can I still charge customers GST/HST without a GST/HST#, seeing that I am well below the $30,000 mark?

3. What is the current process and fees associated with a) registering your business and b) getting a BN/GST & HST#?

Thanks.
1. They usually want the business number with the registered name.

2. No, you cannot charge GST without the number, regardless of how much you make.

3. http://www.cra-arc.gc.ca/tx/bsnss/tpcs/ ... u-eng.html
Deal Addict
Dec 21, 2012
1933 posts
292 upvotes
don242 wrote:
May 10th, 2015 11:28 am
1. They usually want the business number with the registered name.

2. No, you cannot charge GST without the number, regardless of how much you make.

3. http://www.cra-arc.gc.ca/tx/bsnss/tpcs/ ... u-eng.html
I am going to assume the same follows for a sole proprietorship?

If I don't charge tax, can I still claim the tax paid on supplies? I am assuming I won't be able to claim other expenses like vehicle, events, gas, food, trips, etc.

Is there any additional requirements if you're importing from the United States (dropshipping) to Canada, and also selling to the United States (supplier is in the US)?

Thanks again.

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