Q: I’m a plumber earning less than $30,000 per year. In order to bid on jobs I found I needed to have a GST-HST number, so I registered two years ago. But since then, I haven’t earned over $30,000 per year. Do I still have to charge GST-HST? Do I have to file returns?
A: Yes. Once you register for a GST-HST number, you must charge GST-HST on all your self-employment earnings when billing Canadian payers.
The $30,000 threshold is called the Small Supplier Threshold. If you earn less than $30,000 in four consecutive calendar quarters (i.e., in a year’s time), you fall below the threshold. Being below the threshold means you are not obliged to register for the GST-HST.
Obligations for GST-HST registrants
And once you register, regardless of your revenue or freelance earnings going forward, you take on all the obligations of being a GST/HST registrant:
- You must charge GST-HST to Canadian payers on all your self-employment income;
- You must remit to the government all the GST-HST you collect [less Input tax credits]; and
- You must file GST-HST returns regularly
So even though you didn’t have to register for the GST-HST and your earnings still fall below the small supplier threshold, having done so you must fulfill your obligations as a GST-HST registrant.
What if CRA sends you a bill?
If you fail to file returns and remit GST-HST, CRA will eventually contact you to demand those returns, or to demand a remittance based on a number they basically make up. Often the amount of GST-HST they request is too high. The only way to bring it down and to get out of trouble is to go back and file the required returns and remit the GST/HST calculated on those returns.
Not to worry. Personal Tax Advisors has helped countless Canadians file their overdue GST-HST returns, minimize the amount of GST-HST owing, and obtain an income tax refund in the process.