Web Desginer - HST?

[matt94gt]

As a web & graphic designer I have never had to have a GST# since I do not sell a 'tangible' product. So I have never had to charge a client a cent for taxes.

My question is with this new HST rule will I now have to start charging some amount of tax?

Thanks in advance,
Matt

[realcanadian]

As a web & graphic designer I have never had to have a GST# since I do not sell a 'tangible' product. So I have never had to charge a client a cent for taxes.

My question is with this new HST rule will I now have to start charging some amount of tax?

Actually, as a web designer you didn't charge GST because you were making under $30k per year (and if not then watch your back because you were breaking the law!).

You'll need to charge HST according to the HST rules: http://www.rev.gov.on.ca/en/taxchange/needtoknow.html

[KIDAVENGER]

GST/HST always applied to goods and services; If you have over $30,000 in sales over any 12 month period, you are required to be registered and collect the tax, if you are under 30k it's elective.

[Arrow]

Actually, as a web designer you didn't charge GST because you were making under $30k per year (and if not then watch your back because you were breaking the law!).

You'll need to charge HST according to the HST rules: http://www.rev.gov.on.ca/en/taxchange/needtoknow.html

"If you are already registered for GST, no further registration is required. If you are not required to register for GST, you do not need to register for HST."
- Wouldn't this imply that he would not need to charge HST since he's currently not required to charge GST?

[Icedawn]

"If you are already registered for GST, no further registration is required. If you are not required to register for GST, you do not need to register for HST."
- Wouldn't this imply that he would not need to charge HST since he's currently not required to charge GST?

I think the issue is whether he perhaps should be charging GST...

[matt94gt]

Found this online


"When determining whether you should be charging your clients GST or HST you must first determine whether or not your business fits the Canada Revenue Ageny’s (CRA) definition of a “Small Supplier”. The CRA defines a Small Supplier as a business “whose total taxable revenue before expenses are $30,000 or less annually.”[1]

If your business fits into this definition then you are considered a “Small Supplier” and therefore you are not legally obligated to register to collect GST/HST.

If the total annual taxable revenue of your business is greater than $30,000 (before expenses) then you are NOT a Small Supplier and therefore you ARE legally obligated to register to collect GST/HST.

As a Small Supplier even though you do not have a legal obligation to register to collect GST/HST you can still choose to register voluntarily. The incentive here is that because you will be charging GST/HST on your web design services you will be able to “claim Input Tax Credits (ITC) for the GST/HST you paid or owe on purchases related to your business.[2]

So, if your business is considered a Small Supplier you do not have to register to collect GST/HST, but if you find yourself with a lot of business expenses and the GST/HST on those purchases is quite high, you can volutarily register to collect GST/HST for your services so that you can “reclaim” the GST/HST you’ve paid on your business expenses.[3] Just remember, if you’ve gone this route you will have to start charging your clients GST/HST for your web design services.

In British Columbia, Web Hosting, Web Design or Domain Registration are non-taxable services, and as such you do not charge PST on those services."


Guess that sums it up.

[JWL]

Pretty much. So are you a Small Supplier?

[matt94gt]

Well this will be my first full time year doing it so I cant say how much I will make. Im sure it will be under $30,000 though. Therefor I dont need to charge HST correct?

[Buggy166]

Well this will be my first full time year doing it so I cant say how much I will make. Im sure it will be under $30,000 though. Therefor I dont need to charge HST correct?

its "30000 dollars or LESS" just fyi

[matt94gt]

its "30000 dollars or LESS" just fyi

oh im aware of that. im just saying its half way through the year and I will be under the 30k mark.

[matt94gt]

Now some people have been saying I should charge HST, some say I am a small supplier so no. Is the 30k mark still apply to charging HST?

Thanks

[SpillOnAisle9]

I would sign up for it because it's a free 4% of your revenue back in your pocket. Take a look at the "Quick Method" for which you qualify. When
you use this method you bill your clients services+13% but you only remit 8.8% to the feds. This is in contrast to the ITC method that allows
you to deduct all of the HST you pay on supplies to generate your business revenue. Use whichever method suits but either way if you don't
file you're kissing money away.

[Just Confused]

I would sign up for it because it's a free 4% of your revenue back in your pocket. Take a look at the "Quick Method" for which you qualify. When
you use this method you bill your clients services+13% but you only remit 8.8% to the feds. This is in contrast to the ITC method that allows
you to deduct all of the HST you pay on supplies to generate your business revenue. Use whichever method suits but either way if you don't
file you're kissing money away.

+1

In addition, it is a contribution towards your credibility/reputation. Any business that has not bothered to register for or charge GST/HST has a big sign on it that says "amateur". If you want to charge higher rates for your design work, you need to start working on building your "brand" strength and credibility. As SpillOnaisle9 pointed out, in service businesses (like web design) there are inherently few ITC's, so you'll be making a tidy little sum by getting on this. In summary... getting compensated to charge more.... I smell a no-brainer.