Why Set up an HST/GST Account?
HST/GST is the Harmonized Sales Tax/Goods and Services Tax which is levied at 13% on most of our goods and services. As a business owner it is a wise decision to open an HST/GST account with Canada Revenue Agency even if you are doing so on a voluntary basis. By opening an HST/GST account, you get the opportunity to claim back money you spent on purchasing things in your business. This is especially important when you are just starting up your business. In the beginning stages of a business you are more likely to spend more than you earn and opening up an HST/GST account at this time would benefit you by giving you back the money you spent on taxes, which essentially helps a business with cashflow, a crucial component for young businesses.
Once your business income surpasses $30,000 in any quarter or annual period, it becomes mandatory that a business must open an HST/GST account. As a business owner depending on the kind of business you operate, you may be eligible to not collect HST on sales and can claim the expenses you incur. Delivery companies that does contractor work on behalf of a larger company falls into this category. In so doing your business has the potential to earn a quarterly income. It is important to see if your business qualifies for this opportunity.
Paying HST/GST payable when it is due avoids late charges, penalties and the risk of being audited. Setting up your HST/GST account on a quarterly basis gives a company a chance to recover big expenditures during the quarter rather than at year-end (if an annual filer) where it may not be qualified due to a high overall for the year. For more details about setting up an HST account, please call 416-629-1347 or visit All-Good-Accounting.com
income (if you are a quarterly filer).