When Does My Small Business Need to Start Collecting HST? - Keenans Accounting Service

As a small business owner, do you know when your business should start collecting HST? 

The Canadian Revenue Agency (CRA) states that you have to register for an HST account if:

 

You make taxable sales, leases, or other supplies in Canada

And you are not a small supplier

 

This could be confusing, especially if you do not know if your goods or services are taxable or what qualifies as a small supplier. 

 

A general rule of thumb is that once your business sales exceed $30,000, your business is no longer considered a small supplier and you are required to register and collect HST. 

 

While sales tax is charged on most goods and services, there are some  that are exempt. Basic groceries, agricultural products, prescription drugs, long-term rentals of residential accommodation and legal aid services are some examples of exemptions. For a more comprehensive list of exempt goods and services visit the CRA website here.

 

Here are some more in-depth examples of when your business should register and start collecting HST and the date you need to start collecting HST.

 

• If your business does not exceed $30,000 in sales over four consecutive calendar quarters, your business does not have to register for HST.

 

• Although you may choose to register voluntarily if you make taxable sales, leases, or other supplies in Canada. Your effective date of registration is usually the day you request your GST/HST account (or up to 30 days before that day).

 

• If your business exceeds $30,000 in sales in a single calendar quarter. This means you are no longer a small supplier and must charge HST on the supply that made you exceed $30,000 within the calendar quarter. Your business must register for HST.  

 

• Your effective date of registration is no later than the day of the supply that made you exceed $30,000. You have to start charging GST/HST on the supply that made you exceed $30,000.

 

• If your business exceeds $30,000 in sales over the previous four (or fewer) consecutive calendar quarters (but not in a single calendar quarter). This means you are no longer a small supplier at the end of the month following the quarter in which you exceed $30,000. Your business must register for HST.

 

• Your effective date of registration is no later than the beginning of the month after you are no longer a small supplier. You have to start charging GST/HST on your taxable supplies starting on your effective date of registration.

 

You are an expert in your field, we are an expert in ours. Let Keenans Accounting Service support your business with all of your bookkeeping and accounting needs, including your government remittances for HST. Give us a call at 705-526-7628 to arrange a consultation by phone or via Zoom meeting. Contactless, secure document dropoff and pickup are available at our offices in Downtown Midland.