Do you need to pay HST instalments?

©iStockphoto/TABoomer

©iStockphoto/TABoomer

While instalments have been always been required of HST registrants in the year after they remit at least $3,000, not warning those registrants seems to be new.

Instalments are equal to one quarter of the previous year’s total HST remitted. So for example if you remitted $4,000 for HST for 2011, your instalment payments for 2012 would be $1,000, four times per year.

If you don’t pay the required instalment by the due date, you may be charged interest on the missed payment(s) after you file your next HST return. At the time of writing, CRA’s interest charge is 5% p.a.

Instalments are due within one month of the end of each fiscal quarter. For a business with a December 31 year end, this would mean that instalments are due April 30, July 31, October 31, and January 31.

To pay your instalments, you can either pay directly at your bank, use online banking, use CRA’s online payment service, or deliver post-dated cheques personally to your local tax office. If you’d rather pay by mailing a cheque, you’ll need to include a Remittance Voucher, which is basically a slip that informs CRA how to direct your payment. These vouchers usually aren’t available for download, and must be ordered directly from CRA.

To learn more, visit CRA’s page on HST instalment due dates.

Alternatively, you can call CRA’s business and HST services at 1-800-959-5525 (press * to speak to an agent).

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