As a Small Business Accountant in Hamilton, HST is one of those issues that can confuse new and seasoned business owners. HST is a complex tax and the technical language surrounding HST can be overwhelming.
Some business owners scramble when they can not find all of the expense receipts so that they can claim the HST (Input Tax Credit). When paperwork is missing, panic sets in because they need to report HST and it is usually down to the wire. It can be challenging to stay on top of regular business demands while keeping good accounting records. The intention is there but somehow other business priorities creep up. Is that you?
That is when it is a good idea to talk to a Chartered Professional accountant, to understand what type of HST reporting is best suited for your small business.
The quick method is very easy to use but some businesses are disqualified from using the Quick Method. Many small businesses are not even aware of this option of HST reporting.
Here are some facts about using the Quick Method
- You have to elect to use the Quick Method, there is a form to complete: GST74
- You can not claim ITC (Input tax credits) this is the HST that you pay on expenses
- Your Sales are less than $400,000, use a set rate for Ontario rate is 8.8%
- You can also claim an additional credit on the first $30,000 of 1%, a max of $300
When you choose the Quick Method of HST you are still required to collect the proper amount of HST (i.e. 13% in Ontario). You do not change the rate of HST/GST that you are required to charge, the Quick Method only affects the way in which you report your HST to The Canada Revenue Agency. Here is an example for a small business in Ontario:
Benefits of using the Quick Method is that it reduces the amount of paperwork, you do not need to track your (ITC) because you work off the gross sales for the reporting period.
If you would like to chat about which method of reporting is best for you, reach out and contact Susan Ivanovics, CPA at: firstname.lastname@example.org