Consulting - Sales Taxes

[maurice93]

I figure some of you must be do consulting work.

A former employee needs me to complete something urgently, and I agreed to do some work at their site over the next two weekends. They are paying me as a consultant - its about 40-50 hours of work. I have never done consulting work.

Would I need to charge HST or GST. Is there a dollar threshold for service provided. Does it matter that it is just a one time thing, and I have an other full time job.

Any answers or good links would be appreciated.

Thanks

 

[JohnC]

I figure some of you must be do consulting work.

A former employee needs me to complete something urgently, and I agreed to do some work at their site over the next two weekends. They are paying me as a consultant - its about 40-50 hours of work. I have never done consulting work.

Would I need to charge HST or GST. Is there a dollar threshold for service provided. Does it matter that it is just a one time thing, and I have an other full time job.

Any answers or good links would be appreciated.

Thanks

There is a threshold below which you don't need to charge HST, and you shoul be well below that!

 

[maurice93]

Thanks John. I just did some research on the net as well, and it seems like the threshold is net revenue of $30K.

 

[TeasePlease]

$30,000 is the threshold.

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

 

[Rockslinger]

$30,000 is the threshold.

Isn't this the same threshold from 20 years ago? If yes, don't they update these things?

 

[TeasePlease]

Yes, and no. Why would they want to raise the threshold to not have to pay tax?

 

[Sieggo]

I just did some research on the net as well, and it seems like the threshold is net revenue of $30K.

It's actualy gross revenue of $30000.00

Many people confuse that

 

[oldjones]

Also note that the threshold requires you to register and open an HST account. Once registered, you must make returns and pay on time no matter what the gross until you close that account.

 

[K Douglas]

You do not need to worry about charging HST if this is a one time consulting gig. However, if you exceed the threshold of $30K in a calendar year you must register and charge HST on your consulting services. If you have any questions call the CRA business window 1-800-959-5525. I have them on speed dial.

 

[Cassini]

Some vendors are squeamish about paying a "small" business directly, as opposed to paying an employee. Canada Revenue gives the businesses grief if no one pays taxes on the income. Additionally, distributors sometimes refuse to deal with anyone without an HST number, as most distributors are not allowed to sell directly to end users.

If you have an HST number, it silences this debate. You are a business, and no one will argue otherwise.

 

[TheKing]

Careful with crossing the $30k limit (going above it, and dropping below it)

Going over the limit - if you think there is even the slightest chance you will go over $30k gross revenue, you SHOULD APPLY for the HST number. Here's why.... if you have revenue of $31k and didn't sign up for HST, you are STILL liable to the gov't for the HST that you 'didnt collect'. So you still have to pay it although you didn't collect anything! Better to be safe than sorry and collect the GST if you think your business could approach that amt in a year.

Dropping below the limit - Once you register for HST, you need to wait a year before you can apply to cancel your acct with them. So if you decide 2 weeks after getting the HST # that you won't need it because some big contract fell through and you will only sell 4k this year, you need to collect and remit HST on the 4k. Then next year you can say that you only sell 4k/yr and ask to cancel the hst num.