Running your own contracting business is not easy when you don’t have enough knowledge regarding the taxes. As an owner of a business, you have to be responsible for all your expenses, tax payments, and other legalities. But don’t worry, we will tell you the nitty-gritty details of the HST (harmonized sales tax) and GST (Goods and services tax) and when you have to charge it. Read along to find out more!

When to Charge GST/HST

There is a specific criterion for charging the GST/HST. For example, when your business generates more than $30000 in a year, you are eligible to charge GST and HST. You have to make sure that you register for the GST/HST number within 29 days of making $30000. GST and HST apply to both the labor and the cost of the materials. Being a contractor, you can either charge GST or HST on the whole project or make different invoices for the laborers and materials.

Getting a GST/HST Number

Your business wouldn’t get an exception from paying the taxes if it is on a small scale and operates differently than other businesses. Like any other business, you have to be keen regarding the tax claims and the payments. However, the process of costing might differ slightly. GST/HST is a number that permits you to charge GST and HST in your business. It is assigned by the Canada Revenue Agency (CRA). It is better to register for the number once you start the business. It doesn’t matter how much your business is making a profit. It can be done online or by calling the Canada revenue agency.

How to Charge and Collect GST/HST

Once you complete the registration of the GST/HST and have got your GST number, you can now charge your customers with GST/HST on the taxable goods you provide to them. The GST/HST you receive is remitted to the CRA on either a quarter or annual basis by filing a GST/HST return using your GST number, which is unique. This number is referred to by the CRA as a business number. Don’t worry if all of this is a little bit confusing. Most business owners do not have the necessary taxation knowledge. But that is not an issue anymore. You can just contact a reliable accounting company in Toronto and beyond, and they will handle it all for you.

The Rules of Charging GST/HST Across Canada

Ensure that you know when to charge the HST; there are some provinces in which you have to charge the HST only. The reason is that some provinces have their goods and service tax combined with the regional tax.

Conclusion

Ensure you know and understand the GST/HST process and how it impacts your business before launching a business in Canada. The CRA offers various publications and brochures that provide additional information regarding GST/HST, including guidance tailored to specific types of companies. You need to keep all the records of your paperwork as it is vital to your business because you also have to provide it to the CRA. You can file your taxes until 15th June of each year. For any queries and questions about GST and HST, contact our accounting experts today, and they will gladly guide you through it all.