Charging H.S.T.

[rgkv]

I heard the other day, as I have heard a few times over the years that if a business has less than $30,000.oo worth of sales per year they do not charge or pay the H.S.T.
Anyone know if this is true, I find nothing about this on their website and find myself looking at entering this sort of situation....

 

[afterhours]

in your bracket (under $30K) you have an option of registering or not registering for HST; run it by your accountant as it might make sense to do one or the other depending on the nature of the business

 

[Curious36]

As a business owner I believe that ANY tax collected on behalf of the government is to be repaid. Now I know about HST offsets but that is an entirely different topic. Logistically, and from past dealings with government, I cant see the gov't giving any "freebies". But, your best bet would be to contact the gov't directly as ignorance is no excuse for breaking the law or tax avoidance.

 

[Rockslinger]

That $30,000 threshold hasn't changed in 20 years. Same with the $20 mail exemption.

 

[SamTores]

I heard the other day, as I have heard a few times over the years that if a business has less than $30,000.oo worth of sales per year they do not charge or pay the H.S.T.
Anyone know if this is true, I find nothing about this on their website and find myself looking at entering this sort of situation....

Agree with afterhour’s comments. Run it by with your accountant to ensure you are able to make an informed decision. Also you can find out your HST requirement by completing a shortfew steps of questions ate CRA’s website link: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/rgstrng/rgstr/q1-eng.html. Hope this helps!

 

[John Henry]

Well I don't know anything about HST but if someone wants to charge me HST their invoice better have a HST number , other wise I'm not paying it . The HST that is .

Have had a few people try charging me HST with no HST number . That to me means more money in their pocket . One guy wanted to put a lien on my house . I told him go ahead , when your doing that I'll be contacting Revenue Canada about him .

Nothing ever happened .

 

[rgkv]

Well I don't know anything about HST but if someone wants to charge me HST their invoice better have a HST number , other wise I'm not paying it . The HST that is .

Have had a few people try charging me HST with no HST number . That to me means more money in their pocket . One guy wanted to put a lien on my house . I told him go ahead , when your doing that I'll be contacting Revenue Canada about him .

Nothing ever happened .

This is not my case...I am a registered business with a HST # that by law is printed on my receipts.....My only question was since semi retiring my overall sales will drop below the 30.000 point...and since I had heard that if that's the case you don't charge or pay HST I am looking for an answer
Looks like though since I am registered they is no way around it

 

[afterhours]

This is not my case...I am a registered business with a HST # that by law is printed on my receipts.....My only question was since semi retiring my overall sales will drop below the 30.000 point...and since I had heard that if that's the case you don't charge or pay HST I am looking for an answer
Looks like though since I am registered they is no way around it

Even assuming you cannot undo the registration, I don't see why can't you register a new small business which does not need to register for HST and operate it on that basis.

 

[John Henry]

This is not my case...I am a registered business with a HST # that by law is printed on my receipts.....My only question was since semi retiring my overall sales will drop below the 30.000 point...and since I had heard that if that's the case you don't charge or pay HST I am looking for an answer
Looks like though since I am registered they is no way around it

Well I think that is exactly what you should say when contacting Revenue Canada . It would be interesting to see what they have to say .

A very interesting situation .

 

[JohnHenry]

This is not my case...I am a registered business with a HST # that by law is printed on my receipts.....My only question was since semi retiring my overall sales will drop below the 30.000 point...and since I had heard that if that's the case you don't charge or pay HST I am looking for an answer
Looks like though since I am registered they is no way around it

True, that you don't charge HST on your sales, but you lose the ITC for your costs. So you will effectively drop your gross margin by 13 percent. Big question: are you a wholesaler, consultant, or manufacturer?

 

[afterhours]

True, that you don't charge HST on your sales, but you lose the ITC for your costs. So you will effectively drop your gross margin by 13 percent. Big question: are you a wholesaler, consultant, or manufacturer?

another question is who are the clients? If they collect HST they couldn't care less about spending HST

 

[interactive]

Quick and brief. If your taxable supply (sales) exceed $30k you must register. Being a registrant allows you to claim an input tax credit (ITC) equal to the HST that you paid. 99% of the time it is best to be a registrant no matter what your sales are. In your case, no change, keep on charging HST and keep on claiming the ITC's.
There is no provision in the excise act to exempt you from paying it. De-registering still means you will have to pay it with no ability to claim a refund. Regarding who your customers are. Yes, if they are a non registered end consumer then they may prefer a small supplier who hasn't crossed the threshold yet. Let's say a plumber. One registered, one not. Use the non registered plumber at your home and you save 13%. But there aren't any. Why? Because 99% of the time it pays to register.

 

[peeler_feeler]

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/rgstrng/rgstr/q5-eng.html

As interactive stated, 99% of the time it is best to be a registrant no matter what your sales are. However, if your sales are less than $30K annually you do not have to register. Or if have already registered and now your sales will be less than $30K, you can deregister and stop charging HST on your invoices. But then you will not be able to claim HST you pay out on supplies/services you purchase (ITC - input tax credit)

 

[smitherz]

This is not my case...I am a registered business with a HST # that by law is printed on my receipts.....My only question was since semi retiring my overall sales will drop below the 30.000 point...and since I had heard that if that's the case you don't charge or pay HST I am looking for an answer
Looks like though since I am registered they is no way around it

You can elect to de-register your HST account if your sales drop below 30K for 4 consectuvie quarters.

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/bspsbch/cncllng/smll_sp_slprp-eng.html

You won't need to charge or remit HST anymore once de-registered. You will continue to pay HST whenever purchasing goods or services for the business.

There are immediate drawbacks when de-registering... Any capital property still being held by the business basically is treated as disposed of and you're on the hook for the HST payable on their value at time of closing the account. They may also scale back some or all ITC claimed on your last RST return.

The ablity to claim ITC should make it a no brainer, keep collecting and remitting ...you're better off regardless how much your sales are.

 

[oldjones]

This is not my case...I am a registered business with a HST # that by law is printed on my receipts.....My only question was since semi retiring my overall sales will drop below the 30.000 point...and since I had heard that if that's the case you don't charge or pay HST I am looking for an answer
Looks like though since I am registered they is no way around it

I'm in a similar situation; the CRA pointed out the law actually refers to having to register and collect HST if your business revenue is above the threshold. Once you have registered, you must collect and file returns. Their advice was to wind up the previous registered business and do the new jobs as a new entity.

 

[rgkv]

thanks all....my question is answered

 

[guelph]

This is not my case...I am a registered business with a HST # that by law is printed on my receipts.....My only question was since semi retiring my overall sales will drop below the 30.000 point...and since I had heard that if that's the case you don't charge or pay HST I am looking for an answer
Looks like though since I am registered they is no way around it

If your are registered you must collect HST

 

[FunSeeker27]

I'm not up on all of the HST rules, but I would think that if you're collecting HST, then you need to remit it to CRA. I can't see the $30K loophole working otherwise, people would just set up separate company accounts and split their income to stay below the threshold. Mind you, I only wish this worked - I just forked out quite an amount for my HST bill last night.

 

[train]

That $30,000 threshold hasn't changed in 20 years. Same with the $20 mail exemption.

Yes the $30,000 sales limit was put in when they first brought in GST and has remained unchanged under HST.

 

[train]

I'm not up on all of the HST rules, but I would think that if you're collecting HST, then you need to remit it to CRA. I can't see the $30K loophole working otherwise, people would just set up separate company accounts and split their income to stay below the threshold. Mind you, I only wish this worked - I just forked out quite an amount for my HST bill last night.

If under $30 k you don't charge it to your customers in the first place.