Unclaimed ITC's in Suspense Account

by Shareon
(Calgary, AB, Canada)

Sometimes you need to check in with the accountant who prepared the tax return.

Sometimes you need to check in with the accountant who prepared the tax return.

I was reading your section on how to record 'late receipts' for the ITCs (input tax credits).

In the previous fiscal year my client had many missed receipts. They were all posted to a suspense account. At the end of the year the accountant re-classed these to shareholder and included this amount as income (taxable benefit).

Now in this fiscal year my client has found many of the receipts and would like me to claim the missed ITC's.

I would like to be able to change the date of the receipt for the first day in the new period and in the reference/number spot - put the real date of the receipt so you can trace it back to the prior bank statements as you outlined in your previous response. But because I can't go back to the original transaction(s) in the previous fiscal year I think all I can do is print the suspense account from the prior period and highlight those transactions I now have receipts for, add them up and post Dr. GST/ITC account and CR. shareholder.

Is there a better way for me to do this?

section divider


When I chatted about how to claim missed ITCs from previous periods, you will notice I spoke about materiality.

Because the accountant reclassified the unsupported expenses to the shareholder account and included in the amount in income as a taxable benefit tells me the shareholder loan account was in a DEBIT position.

Generally once you have filed a tax return, that period is closed. To make material changes to that period (I.E. reverse the amount taken into income and claim the expenses) you need to file an adjustment with CRA. (See the matching principle.) The rules surrounding withdrawing money from the corporation are very specific and not always easy to understand. You need to have a discussion with the accountant and find out how s/he wants to handle this.

Comments for Unclaimed ITC's in Suspense Account

Click here to add your own comments

Apr 19, 2015
Unsure how to account for HST charged
by: Sharon, Calgary, AB

I just stumbled on a receipt from my client from Canada Post. The receipt shows a subtotal, a GST amount and a separate HST amount. This client is located and operates the business in British Columbia.

How do I treat the HST? Is it to be added to the subtotal like PST or is it to be added to the GST amount?

Apr 19, 2015
by: Lake

I'm not sure what you mean. Just key in the HST item purchased on a separate line from the GST ... applying the right tax code on each line of the data entry form. The accounting software will take care of the rest automatically.

You should end up with a transaction that looks something like this:

Debit Postage $10.00 (for stamps-GST)
Debit Office Supplies $15 (for envelopes-HST)
Debit GST/HST Payable $0.50 (for stamps)
Debit GST/HST Payable $1.80 (for envelopes)
Credit Cash in Bank OR Credit Card $27.30

The fact that HST is on a BC receipt tells me the transaction occurred sometime between July 1, 2010 and March 31, 2013.

See https://www.bookkeeping-essentials.com/harmonized-sales-taxes.html for more information.

Click here to add your own comments

Return to Self-Employed Bookkeepers.


Back to top