If you are in the midst of starting up a small business, it might be the right time to think about when the best time is to register for GST.
GST is something that any profitable business has to sign up for at some point. Whether you are a contractor, consultant, sole proprietor, or entrepreneur, when you hit a fluctuation in your revenue that exceeds $30,000 in over four quarters, you then must have to register for your first ever GST/HST number.
It is good to note that there are different registration requirements when filing for GST/HST.
Suppose your company is a non-profit, public service body, or taxi/ride-sharing operation. In that case, you must review the CRA website to see what category your company falls in, or you may prefer to speak with your accounting professional to decipher what next steps you'll need to take.
What Is GST/HST?
A GST/HST is a goods and service tax that business owners or service providers must charge for any item or service they sell or provide to customers while being within Canada.
You will notice this tax is included in the final prices of commodities and is always paid by the customer, never the business owner. Instead, your job as the owner is to then pass it on to the government.
After you register your company, your GST/HST number will be part of your 'business number,' which the Canada Revenue Agency holds. You can easily register for that number online at Canada.ca by either fax, mail, or telephone at 1-800-567-4692.
What do You need for Registration?
There are four things you need on hand when registering for GST/HST These things include:
1. Effective Date of Registration – The effective date can usually be the day you've stopped being considered a small supplier.
2. Fiscal Year for GST/HST purposes – Usually, the fiscal year for GST purposes is generally the same as your income tax year.
3. Total Annual Revenue – This is a complete sum of the revenue you have made in a year; if you are a newer business, it's possible to give CRA a reasonable estimate.
4. Basic information – This means your general personal information.
Once you have all four of these, registering can be done much more efficiently and will take up less time.
Are There Any Benefits to Registering?
In the end, you have no real choice in whether or not you want to register. However, to counterbalance the money you've lost in paying the government taxes, you as the business owner can claim sales tax that is chosen from a wide variety of expenses that relate to your business.
This is a pretty cool aspect that should be thought about because by submitting these sales tax you are essentially reducing the amount of GST/HST you must give to the CRA.
At Capex, we work to help clients get ahead financially by using modern cloud technology designed to streamline their accounting. Together, we can track all your business expenses, putting you on the right track towards fulfilling your government tax filing obligations.