Beginning July 1, 2010, the province of British Columbia created the Harmonized Sales Tax (HST) of 12 percent. For most businesses, the switch from the Goods and Services Tax (GST) to the HST is simple: whenever you would have charged GST, charge HST instead.
That may sound simple, but let’s face it: some of us glaze over when it comes to numbers and bookkeeping. And especially if you're just starting to freelance or if you're new to running your own business, it can seem like a daunting process.
We interviewed Galina Bazova, CMA, BSc, owner of PMH Accounting Services in Vancouver, to get a basic run-down of GST, HST and how to make sure that your business runs by the books.
Disclaimer: These are very general questions and are not intended to be business advice. If you have specific questions about your business or your taxes, please contact a professional.
Q: Why do I need to register for GST/HST?
A: If you provide goods or services and your gross income is:
- More than $30,000 in a single calendar quarter, or
- More than $30,000 in four consecutive calendar quarters,
then you need to register for GST/HST and charge this tax to your clients. You collect GST/HST on behalf of the government, and remit it to the government when you file your annual taxes.
Q: When do I need to charge GST/HST?
A: Once you have registered for GST/HST, you must charge the tax to your clients beginning from the date of registration. If your clients are in:
- British Columbia, charge HST (12 percent)
- Ontario, charge HST (13 percent)
- Any province other than British Columbia or Ontario, charge GST (5 percent)
If you provide services outside of Canada and deliver those services outside of Canada, you do not need to charge GST/HST.
Q: How do I get a GST/HST account?
A: In order to register for a GST/HST account, you need to get a business number (BN). Getting a BN is simple. You can do it online, by phone or in mail.
More information is available on the Canada Revenue Agency website under "How to Register for a Business Number". You should also look at Form RC1 (Request for a Business Number) to see what information you’ll need to get the process started.
Another way is to get an accountant to help you do this.
Q: Where can I go for more information about GST/HST?
A: The Canada Revenue website has lots of information about GST/HST, requirements and accounting methods.
Q: How can I find an accountant?
A: In Canada, accounting is a regulated industry. Look for someone who is a Certified General Accountant (CGA) or Certified Management Accountant (CMA). Either will have the industry certification and experience to provide you with solid advice.
You can search online or in the phone book for a company close to you, but the best way is to ask for referrals from friends or co-workers. Once you have a few leads, call and leave a short message or send an e-mail. How does the accountant respond to you? Do they respond in a timely manner and address all your questions? Are they polite? Do they seem knowledgeable and trustworthy?
Many thanks to Galina Bazova, CMA, BSc, for taking the time to answer these questions. Galina has kindly agreed to answer any additional questions that you might have (see contact information below).
Galina is the owner of PMH Accounting Services, which provides services in personal and corporate taxation and accounting, company and sole proprietorship, partnership registration and set-up, business and management consulting, all types of reports, personal and corporate taxes, payroll and remittance, GST/HST, WCB and more.
Galina loves her job.
Galina Bazova, CMA, BSc
Owner, PMH Accounting Services
Phone: 604-436-0310 or 604-729-2267
E-mail: pmhaccounting at telus dot net