Home-based Business & GST

by Sole Proprietor
(Canada)

Hello,

I am a sole proprietor of an Educational Consultant Services based in my home.

I am filing GST returns for the 1st time and would like to know if I can claim GST paid on home utilities (ie. electrical, water, gas, phone, etc.) on my GST return.

Thank you kindly.

Home office expenses are accounted for on Form T2125 page 3.

It is my understanding that you claim the home office expenses including tax ... which then gets prorated according to business use and that do not take input tax credits.

However, I couldn't find a reference anywhere where it specifically says you can't. You definitely cannot claim 100% of the GST/HST paid.

You may want to call CRA and see what they say. If you do phone CRA, I would appreciate you posting back here with their response.

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.

Comments for Home-based Business & GST

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Mar 21, 2013

Business Expenses
by: Lisa

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/bsnssxpnss/menu-eng.html

As a rule, you can deduct any reasonable current expense you paid or will have to pay to earn business income. The expenses you can deduct include any GST/HST you incur on these expenses less the amount of any input tax credit claimed.

Since you cannot deduct personal expenses, deduct only the business part of expenses from business income. In addition, you cannot claim expenses you incur to buy capital property.

Note
When you claim the GST/HST you paid on your business expenses as an input tax credit, reduce the amounts of the business expenses you show on Form T2125, Statement of Business or Professional Activities, by the amount of the input tax credit. Do this when the GST/HST for which you are claiming the input tax credit was paid or became payable.

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