While many people worry about being audited, audits are relatively rare. It’s much more common – and potentially very expensive – to be caught unregistered for the GST/HST.
One of the most costly mistakes you can make is not registering for the GST/HST when you reach the $30,000 mark. The scary thing is, CRA usually catches up to you a few years later, and retroactively asks for all the GST/HST you were supposed to have been billing/collecting all that time.
Registering for the GST/HST is possible at any time, but it’s only mandatory when you’ve billed at least $30,000 in self-employment in any 12 month period. As soon as you’ve crossed that threshold, however, you’re responsible for knowing that it’s time to register. You do not receive a warning or notification from CRA saying it’s time to do so.
Our office has learned that CRA is planning to start reviewing self-employed income tax returns for the 2012 tax year, looking for people who report billing over $30,000 and confirming that they have registered for the HST. If they haven’t, CRA will retroactively register them and demand remittances retroactively as well. In other words, you’re responsible for delivering the HST you should have been collecting for the past year or two.
The good news is, even if you didn’t register when you should have, you can still do it now. So long as you’re registered before CRA gets to your file – even if you registered the day before they call – they’ll leave you alone.
So if you did cross the $30,000 threshold in 2012 but you haven’t yet registered for the GST/HST, you still can. Get to it before May in order to avoid the coming crackdown.
Registering is free, fast, and can be done over the phone. Call CRA’s business enquiries line at 1-800-959-5525 and press * to speak to an agent. The agent will guide you through the process and get you registered on the spot. Until the end of April, CRA’s hours are extended and live agents are available from 8:15 am to 8:00 pm local time on weekdays.