Entrepreneurship & Small Business

Newspaper delivery-expenses and HST

  • Last Updated:
  • Oct 30th, 2019 11:00 am
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[OP]
Newbie
Jan 23, 2016
3 posts
NS

Newspaper delivery-expenses and HST

Hey All,
I recently picked up a rural newspaper delivery job, this is a contract job, the publisher deducts no taxes, cpp, or EI from my pay. I am just delivering...not collecting payments, not buying and reselling the papers, just delivering to paper tubes, mailboxes, driveways, a few porches and 2 stores get a dozen papers each. The route itself is 255KM's per day and nearly 200 newspapers per day six days a week, Start time is usually around 1:30AM and finish up about 5.5 to 6 hrs later, although I'm sure it will take a bit longer in the winter.
The pay is surprisingly well ( at least so far) for what it is, works out to nearly $1.00 a paper including mileage.

First question, Should I or do I have to register as a business?

My understanding is that I can claim the same % of my vehicle expenses as the % of KM's I use my vehicle for the route vs personal use. I'm keeping all gas receipts as well as all receipts for maintenance/repairs. I'm also keeping track of odometer readings at the start and end of every delivery. Anything else I should be doing or keeping track of for expenses?
Also, I do plan on purchasing a vehicle designated for the paper route.

As for HST, once a self employed person make over $30,000/yr they are required to become a HST registrant, which I will be . The following is a snip from CRA's website:
"Carriers who are registrants are required to charge the publisher the GST/HST on their services and to include this amount in determining their net tax. They may also be eligible to claim ITCs for the tax paid or payable on their business expenses, subject to the normal rules respecting ITC eligibility"
I don't say that the publisher will pay me anything extra for HST, likely accounted for already in pay...
When it comes time to submit my HST ITC's. Does it work the same as claiming expenses against income tax? As in % wise with the KM's used for business to figure eligible ITC's? I've found some info online on this topic, but some of it is gibberish to me.

Thanks for reading, and any help, thoughts, or tips would be greatly appreciated.
2 replies
Deal Fanatic
Oct 7, 2007
8394 posts
4355 upvotes
It would probably be in your best interest to set yourself up as a business. If the revenue is relatively small and the risks to your business are low, you may skip incorporation and just set yourself up as a sole proprietor. An accountant could probably assist with preparing your financials or if you are savvy you could google running a small business in Canada to get yourself set up properly with all the necessary accounts for HST, PST, WCB, etc. You might be better off setting up the HST right from the get go so you can start accumulating your ITC's right away. In the meantime, keeping all receipts are a good idea so that your accountant can make sure you get credit for all proper deductions.
Newbie
Oct 30, 2019
41 posts
62 upvotes
As a contractor, they've hired you as a business so should be amenable to paying HST on top. If you've registered for HST and provide the number, they get to claim that as an ITC, so it will all net out for them.

Basically every business sums up all of the HST that they have collected from customers, then subtracts all of the HST they have paid to suppliers/vendors (including you!) and then pays CRA whatever the difference is.

Definitely worth bringing up and explaining that every dollar of HST they pay you they won't have to pay CRA. You may need to get their accountant on the phone to confirm. If they tell you that that $1 per paper includes HST, well that's a very different contract than what they originally stipulated.

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