Goods and services Tax (GST) and Harmonized Sales Tax (HST) are value-added taxes levied by the CRA to generate revenues for the government. The rate in Ontario is 5% GST and 8% PST (provincial sales tax). However, to make things simpler, Ontario harmonized the Federal and Provincial rates and charges a flat 13%.
You must charge GST/HST if either you exceed $30,000 in four consecutive quarters or if you exceed $30,000 in any single calendar quarter. However, if you are part-time and don’t meet any of these thresholds you are considered a “small supplier” by the CRA and do not need to charge these taxes.
Taxi drivers and ride-sharing drivers however must register for GST/HST immediately upon driving and do not fall into the “small supplier” rules.
This depends. If you don’t register you also forgo the opportunity of receiving a GST/HST refund; a benefit only given to those registered. This can be sizable especially in the early days of a business where many costs are incurred, particularly for renovations and construction/rent.
Give us a call or and we can set this up!
There are three frequencies to file, annually, quarterly or monthly. However, the frequency that you want to select depends on your individual circumstances. Meet with us to determine what is best for your needs.
Filing requires tallying all GST/HST charged on invoices and offsetting this against GST/HST paid on qualified purchases for a specific period of time. It requires detailed record-keeping and is subject to review and audit by the CRA for up to seven years after filing.
Certain businesses can qualify for the “quick method” which involves calculating GST/HST as a percentage of revenue rather than tallying up individual invoices and receipts. It also gets you away from having to file monthly and quarterly return minimizing time and costs.
Using the quick method may not always be as simple or as “quick” as the name suggest. Set up an appointment and we can help in you make that decision.
Audits are an important part of the CRAs process to ensure individuals and businesses are holding up to their tax obligations. They can be extremely painful to deal with if the appropriate records are not maintained and a significant disruption to your business.
Though audits cannot be 100% avoided there is good news is that if you maintain appropriate records audits can be relatively routine and be wrapped up in a matter of days.
At Global Accounting we have experienced hundreds of audits across a variety of industries. Best yet there is the option to have the audit at our office where we maintain all contact directly with the CRA so there is limited to no disruption to your day-to-day business.
At Global Accounting we represent a variety of clients and businesses spanning personal income tax clients to small and medium sized businesses from $0 to $10M. The services span from personal income tax, wealth management, business plan preparation, tax strategy and consulting.
Though not required tax laws change every year and are very complex. A misrepresentation of your income taxes can put you at risk of a personal tax audit. Any adverse audit can impact everything you do from accessing your money at the bank to obtaining future financing for your home and getting your next job.
At Global Accounting we have committed ourselves to professional development and total quality management in everything we do. We consider not just your personal tax situation but your family’s for this year and years to come.
See our checklist!
No business is required to incorporate, in this case you would be considered a Sole Proprietor for income tax purposes and file your business affairs with your personal income tax return. However, this does not make you exempt from registering for GST/HST if you exceed the “small supplier” rules (see Do I need to register for GST/HST).
There are a host of advantages for incorporating including protecting your personal assets. Set up an appointment with us to discuss these and if they make sense for your business.
This is a hot button topic in the industry which has hit the IT and trucking industry most significantly and is not as clear cut.
It matters because being considered as one or the other will have significant tax consequences that impact what business expenses you can claim and the payment of employee payroll tax.
Little weight is given to the written contract between you and the business. The CRA considers the intent of the business relationship and looks at the below factors:
I. Your opportunity of profit and risk of loss to the individual (are you being regularly paid on payroll, do you invoice your work out, is there an ability to hire subcontractors or assistants)
II. Whether you own your own tools and equipment and maintain your own insurance;
III. Level of direction, scrutiny and control the business has over your work, tasks and deadlines;
IV. Level of integration you have with the business and work environment, do you attend departmental meetings, attend company retreats, etc.
The CRA looks at these factors both separately and together in making their decision. Many individuals feel that by billing their work through a company they are automatically considered an Independent Contractor giving them the opportunity to deduct bank charges, meals, vehicle expenses, phone, etc.
However, the CRA has been recently reviewing many corporations and have gone back 5 years disallowing deductions for these types of “Incorporated Employees” creating large tax burdens and penalties more than $50,000.
Ensure you are on the right side of your business affairs and speak with us before you negotiate that new business relationship.
Yes we can; we currently serve many ride sharing clients. And good news is that you are considered an Independent Contractor giving you access to a variety of business deductions such as:
This also means you are left to file your own taxes for self-employed individuals. Meet with us to ensure you are claiming your share of business deductions to minimize your tax liability.
Yes. Luckily you can also claim a share of your housing expenses to offset that income reducing your tax liability. The CRA in partnership with the Province is cracking down on this unreported income. Meet with us to make sure you are on the right side of the CRA.