Hi Folks! This is for my fellow Canadian small business operators out there including gig economy workers and side gig operators. Even if you generate very little income, you may be SURPRISED to learn how this information can put cash in your pocket right now.
As many of you know, you are required by law to register to get a GST/HST number from the Canadian government as soon as your business, sole proprietorship, hobby, charity, etc generates $30,000 unless you provide a tax exempt service such as medical services.
Some people don’t want their small business to seem small so they get their GST/HST number earlier than required and what do those people notice? Ah, finally a reward. Money back from the government!
Yes, it’s true. When you have a GST/HST number you must charge the tax applicable to your customers province or territory. The total you charge is declared, often monthly or quarterly on a GST/HST return along with…wait for it…EVERY PENNY YOU PAID IN GST/HST FOR EXPENSES NEEDED TO OPERATE YOUR BUSINESS. These are known as Input Tax Credits, or ITC’s for short.
You subtract what you paid in GST/HST from what you collected and you remit the rest to CRA.
This means your business does not pay GST/HST for it’s allowable expenses anymore. That’s the message here. If you’re a sole proprietor with multiple side gigs you can use one GST/HST number for everything you do.
Hope this helps you!
DGB
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Small Business loans $15,000 to $4M