Corporate Legal Services – Business Advisory 2

If your business makes at least $30,000 a year, you are not considered a small supplier and must register for a GST/HST number. When calculating your business income, add the amount of GST/HST to your gross sales or fees to calculate your adjusted gross sales or adjusted professional fees.

When registering for a GST/HST number, have the following information on hand:

• Effective date of registration: Your effective date of registration is usually the day you stop being a small supplier. If you request your GST/HST account when you are still a small supplier, your effective date of registration is usually the date of your request. It may also start up to 30 days before that day.
• Fiscal year for GST/HST purposes. Usually, your fiscal year for GST/HST purposes is the same as your tax year for income tax purposes.
• Total annual revenue from your taxable sales, leases, and other supplies including those that are zero-rated, as well as the taxable supplies of all your associates. If you are a new business, you may give a reasonable estimate of your income for the year.
• Basic information includes personal information, such as your last name, SIN, date of birth, and address, as well as business information, which includes your business name, BN, type of business or organization (sole proprietorship, partnership, corporation, or registered charity), name and SIN of all owners, physical and mailing address, and description of your business activity.

The rate that you charge will depend on the province or territory in which the supply is made. The current rates are: 5% (GST) in Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Quebec, Saskatchewan, and Yukon 13% (HST) in Ontario 15% (HST) in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island For example, your store in Vancouver, B.C. delivers a mattress to your customer in Toronto, Ontario. You charge 13% HST on the sale because the place of supply is Ontario.

You are responsible to hold the GST/HST in trust until you send it to the CRA. This includes the collectible tax that you charged and have not collected yet. At the end of each reporting period, you need to complete and file a GST/HST return and remit the net amount of GST/HST to the CRA. You must keep the records that will support the information you provide on your GST/HST returns. Your records must include:

• the amount of GST/HST you collected
• the amount of GST/HST paid and payable on your eligible business purchases and expenses
• the amount of tax to be refunded, rebated, or deducted from your net tax
• a description of the goods and services in enough detail to determine whether or not GST/HST applies.

  Payroll Tax Account

1. Does my small business need to have a payroll tax account?

If your business will have employees (including yourself) you must also register for an RP Payroll account. Again, you can open a payroll account by phoning the CRA business line. The payroll number will be the same as your business number, however it will end in RP0001.