Entrepreneurship & Small Business

Mistake in Not Getting a GST Number?

  • Last Updated:
  • Apr 1st, 2008 9:03 pm
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Deal Addict
Apr 19, 2005
3243 posts
5 upvotes
Toronto

Mistake in Not Getting a GST Number?

Hrmm..just starting my taxes and pondering if I made a mistake in not getting a GST number? I set up a small business early last year and did a bit of work but also purchased some software for that work. Should I even be concerned about the GST that I paid when I purchased that software? Keeping in mind that I did not collect from the clients any GST?

Thanks.
2 replies
Deal Addict
Aug 28, 2007
2167 posts
539 upvotes
Calgary
If your small business makes under $30K per year, you are not obligated to get a GST number. If the product or service you provide is so competitive that 5% will be a factor in the purchase decision, then you can leave it the way it is.

There are two benefits to having a GST number; one tangible and one intangible:
Tangible: Keep in mind that you collect 5% GST and if you elect for the "quick method" of reporting the business retains part of the money as compensation for doing CRA's administrivia for them. You only pay CRA between 3-4%... I'm not sure of the exact rate. No need to track input credits etc.

Intangible: Having a GST number adds to the seriousness with which you regard your business and you're not a "midnight cash" scheme.

Regarding your software, regardless of your GST registration status, you are still able to deduct the whole cost of that purchase including the GST as a business expense.
Deal Addict
Apr 19, 2005
3243 posts
5 upvotes
Toronto
Thanks, JC for clarifying that! :)

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