HST (Harmonized Sales Tax) is a federal Canadian Goods and Services Tax (GST) and Provincial Sales Taxes (PST) altogether that has to be paid by the consumer and businesses at the POS (Point of Sale). The seller collects the tax income by adding the HST rate to the cost of goods and services, then remits that accumulated tax to the Canadian Revenue Agency (CRA), the federal government’s tax division. Afterward, CRA apportions HST’s provincial portion to the respective provincial government. According to proponents in Canada regarding HST, business owners should file HST in Toronto to improve Canadian businesses’ competitiveness and simplify the tax-related administrative costs. It is 13% in Toronto, Ontario.
HST filing might have different deadlines, based on the kind of business you are running in Toronto plus the options you have capitalized on. You can also take advantage of distinct HST filing methods, depending on the one that can benefit you the most. To file your HST return without any mistake, you must hire a tax advisor while saving your money as much as possible. Some business owners may not charge HST on specific goods, such as milk and bread. Hence, these zero-items should be omitted from the charge. This tax may also not apply to a specific group of services. You might be offering childcare, bearing the medical or education costs; HST will not be applied to you on such things.
Whom Should You Depend Upon for HST Filing?
You should consult a reliable accounting firm to find out which items are considered zero-rated, relieved, and taxable when it comes to filing HST in Toronto, Ontario. It will help you save the maximize your HST charges. You will find highly qualified tax consultants in such a firm who understand Canadian tax laws to help you deal with the taxes you owe to CRA, and HST is one of them. Accounting firms have highly competent CPAs (Chartered Professional Accountants) who can help you manage your tax liabilities to make the most out of your tax returns. Therefore, you can rely on utilizing their service for filing HST in Toronto for you.
5 Common Errors Committed by Small Businesses While Filing HST in Toronto:-
Small business owners can make some mistakes if they opt for filing HST in Toronto on their own rather than utilizing the tax consultant’s advice. It can cause them to suffer a considerable loss in the end. If HST paid on expenses are unclaimed, you can risk losing your money when the right time comes to claim your taxes. Here are five common errors that small business owners can make while filing HST:
- Not Reporting the Bad Debts Correctly: You might make a common mistake while reporting your bad debts as a small business owner. You may write the entire amount in the invoice without excluding the HST. If you have to report bad debts due to your short-paid invoices, you should never write down the entire balance as you can omit HST.
- Unproviding Enough Documents: You need to make sure you have all the required documents to support the ITCs (Input Tax Credits) you want to claim, which should include the HST registration number matched with the supplier, description of the sale, HST amount, and payment terms to make your claim.
- Failing to Comprehend Restricted ITCs: Certain expenses are restricted for ITCs claim. For instance, a registrant cannot claim the ITC on a property for an individual’s personal consumption who is or agrees to become a registrant’s employee. Therefore, you need to know restricted ITCs also when you file HST in Toronto.
- Transferring Money to a Different Company without Proof: You will not account for HST if you transfer money to a company without the issuance of an invoice. Therefore, it is advised to have all the records to account for any unpaid HST.
- Not Comprehending Expenses That Are Not Subjected to HST: Certain business expenses are not subject to HST. Therefore, you should not make any claims on expenses such as insurance and bank charges or costs linked with them.
HST is a combination of federal GST and PST that business owners and consumers have to pay at the point of sale. Proponents believe it is profitable for businesses’s competitiveness to file HST in Toronto. HST filings might have distinct deadlines based on the business you are running in Canada. You can rely on a reputable accounting firm’s tax services to help you file this tax without errors. Small business owners might make some mistakes when they file HST, such as reporting the bad debts incorrectly, not providing enough documents, misunderstanding ITCs restrictions, transferring money without proof to another business, and not comprehending expenses that are not subject to HST. Last but not least, to file HST without errors and maximize your returns with HST filing, you need to consult a tax advisor in Toronto.
GTA Accounting (https://www.gtaaccounting.ca/) is an accounting firm that offers top-notch bookkeeping services for small business owners in Mississauga, Toronto, and Oakville at a fair price.