GST Under 30K

(Canada)

TIP - It's important to understand that GST/HST funds are collected in trust

We are starting a small consulting/teaching business. We registered and got a GST number.

We don't expect to earn more than $30K per year. Are we required to collect GST as long as we stay under 30K? Should we cancel our GST account?

Once you are registered for GST/HST, you must collect, report and remit in accordance with your assigned CRA period.

If you click on "The GST HST" navigation button, I have a wealth of information that should help you decide what would be best for your business.

Here a few things you may want to read about:

All about voluntary registration and why you might want to do it

How to cancel a GST/HST account

New place of supply rules for GST and HST

The biggest mistake new business owners make when dealing with funds collected in trust

Some other chats you might want to skim are;

How to create an audit trail to audit proof your records

How to start doing your own bookkeeping

At the bottom of "The GST HST" page, you will find the Forum for GST/HST questions asked by other small business owners.

Good luck with your new business. I wish you every success.

Comments for GST Under 30K

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Nov 16, 2011

I learned something new today
by: Lake

Hi Everyone,

I belong to a few bookkeeping forums. In one of those forums, there was a discussion about whether tutoring was subject HST.

As it turns out, tutoring is considered to be educational, so it does not attract HST.

You can find the listing of exempt services, which includes tutoring, at Businesses> GST/HST> General> Taxable or Exempt?> Exempt Goods and Services

"Some goods and services are exempt from GST/HST. This means that no GST/HST applies to them. [...] many educational services such as:

- courses from a vocational school that lead to a certificate or a diploma to practise a trade or a vocation; or
- tutoring services for an individual who takes a course approved for credit by a school authority or the education service follows a curriculum designated by a school authority."

Apr 09, 2015

True information is shared
by: Michael C. Quinn

Great! I was looking for exactly the same thing all day yesterday.

Feb 04, 2016

Startup ITCs
by: Grace, 100 Mile House

As a new business owner, I'm debating whether to register for GST just in case I make over $30,000 per quarter. (I'm far from making that amount at present.)

Should I wait until I meet that threshold? And if so, is it correct that I can then make a journal entry for any GST paid on start-up costs within the last 4 years?

I have been entering transactions into Sage 50 including both PST & GST. Is this correct?

Feb 04, 2016

Grace
by: Lake

You need to spend time working your way through my GST/HST Guide.

In the chat on registering for GST/HST, I discuss why you might want to voluntarily register before you hit the $30,000 threshold.

In the same chat I explain that you cannot backdate your registration. This means you can only claim ITCs going forward.

The four year 'rule' you are referring to is the time period you have to claim your qualifying ITCs. However I certainly don't recommend waiting that long. If you are doing accrual accounting, you should be claiming your ITCs to net against your GST collected for each reporting period ... which is normally quarterly or annually for small businesses.

Yes you enter both GST and PST. If you have sales tax turned on and have GST and PST number, it will code your GST or PST to the appropriate payable account. If you do not have a GST or PST account, it will expense the GST and PST.

I wish you much success in with your business.

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