Uncollectable Accounts and HST

by Kyle
(St Catharines Ontario)

If the HST collected (on the sale) has already been paid to Canada Revenue, but eventually it was determined that the client's account would have to be written off, what would be the proper entry in the books to reclaim the HST.

Obviously the government owes back the money (I believe they do because I was never actually able to collect the cash). I will debit Uncollectible Accounts Expense, and credit Accounts Receivable. But how to deal with the HST?

Thank you in advance for your help!


Hey Kyle,

Check out my chat on bad debt. In the chat there is a section on how it affects GST / HST.

Briefly, when you do your write-off reverse the amount of HST that was invoiced. The bookkeeping entry required is also discussed in the same chat. As the chat points out, you have to decide if you are following GAAP procedures or Tax-basis procedures. I explain how to book both types of procedures.

If you use QuickBooks, the best way to do your write-off is to use the Credit Memo button.

P.S. Absolutely beautiful picture. Where was it taken?