Most of the business people know they don’t need to be GST/HST registrant before making $30,000 in total taxable revenues annually. Those are defined by the Canada Revenue Agency (CRA) as small suppliers.
Note that GST/HST registration is mandatory for self-employed taxi driver or commercial ride-sharing driver the day taxable passenger transportation services are supplied, regardless of the total annual revenues amount; in other words, there is no small supplier exemption for these types of commercial activities.
While it looks quite simple, the calculations to meet the small supplier definition could a bit more complex… of course, why not? Unless your books are in good standing, you need to be careful not to pass the threshold during the year. As soon as your total revenue exceeds the $30,000 limit, the GST/HST registration becomes mandatory and the small supplier exemption ceases. Business owners and especially start-ups founders choose to benefit from the small supplier exemption as long as possible, the main reasons being: avoiding the mandatory GST filing hassle and/or paying the bookkeeping fees associated to the treatment and increasing their operational costs.
But even if you are a small supplier, you may still want to register voluntarily. Why? What are the benefits?
Most of the start-ups incur expenses and pay GST on their start-up purchases some time before materializing their first sales. A GST registrant may claim the paid GST on their start-up costs and obtain a refund from CRA. A non-registrant will not be able to claim the GST paid on these business expenses retroactively and will lose such benefit.
As a non-registrant, you will not apply GST to your invoices. Depending how you are acquainted with your customers, it may trigger them a negative signal: do you intend to stay “small” or expand? Are you confident enough in your business? If you want to build long-term business relationship, this is one of the tiny things that may matter. Unless you really enjoyed your math classes and always feel an unequaled happiness at the sight of the debit and credit columns, it is always recommended to get help in the early stage for staying compliant and up to date. If you are not an accounting guru, or you have no time to handle your business finances, sooner or later, you will need some level of accounting assistance, either for the year-end process, income tax or for any decision-making process. More you wait, more it may become costly.
If you have any questions, feel free to contact Login Bookkeeping and learn how the GST/HST returns treatment is bundled within the monthly plans. Login Bookkeeping offers free initial consultation that will not hurt to avoid costly mistakes. You can also visit Canada Revenue Agency website: