Can I file a NIL GST Return


GST/HST Registered - Can I file a 'NIL' GST/HST Return?

I registered my flooring installation business (not a retail business, no materials sold - just services) on Oct 28/08. I received my GST/HST Business Registration Number- effective April 1/09. I am just now filing my Personal Tax Returns for 2008 & 2009(including Sole Proprietorship Income/Expense Statement for services). In 2008 my gross BFS income was $10,605 (including $605 GST collected). My net BFS income prior to expenses was $10,000. My taxable BFS income - $938.

By law I was not required to register for GST/HST as my BFS income was below $30,000. However, I did register (to benefit from ITC reductions - which don't amount to much) and I am now getting notices that I must file a GST/HST return by 'certain' due dates - or else.

I have not kept any kind of records (shoebox method) and trying to reconstruct/construct details to prepare my tax returns has been a real nightmare.

My question is this: In the absence of any records with which to track GST/HST received on services provided, can I just file a NIL GST/HST Return based on the fact that my BFS income was less than $30,000?

This is way over my head and I don't know where to start.

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Yikes! ... Let's start at the end. No, you cannot file a nil return if you had sales and expenses in that period ... even if you were under the $30,000 threshold.

Once you have become a GST/HST registrant, you have to file your report with CRA at every reporting period to avoid late filing penalties and interest charges.

One of the biggest mistakes new business owners make is not understanding that the GST funds you have collected are funds that are held in trust.

You are now three years behind on your books and compliance reporting. I have a list that explains when it's time to hire a bookkeeper. It sound like you hit three items on the list.

You should take your shoebox to a bookkeeper and get your books caught up. Once you've got them caught up, keep them up-to-date by hiring your bookkeeper to process your information each month ... each quarter at the bare minimum.

The list I mentioned above, also includes a list on things to consider when hiring a bookkeeper.

P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.

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