The Quick Method of HST Filing for Small Business Owners

 HST (Harmonized Sales Tax) is a comprehensive tax reform package, made mandatory on July 1, 2010, in Canada. Both the individuals and the businesses have to contribute to this tax to improve Ontario's economy. Ontario's government pushed forward by imposing HST on the people to help its province respond to the financial crisis of 2008. On the other hand, Covid-19 was the main reason behind Canada's economic decline in 2020. HST filing should be taken care of you on time as an individual or a corporate if you do not want CRA (Canada Revenue Agency) to penalize you. CRA also introduced the Quick Method to help small business owners calculate their net tax for HST.


How to Use the Quick Method for HST Calculation?


Small business owners can easily calculate their GST (Goods and Services Tax) or HST using the quick method. To calculate the HST payable, the business owners need to multiply the revenue from their supplies or the reporting period using the remittance rate or other rates applicable to their situation as business owners. This method's remittance rates are less than the HST applicable rates; it means you only remit a part of the collected tax, helping you with significant savings in a year.


What Is the Advantage of the Quick Method to Calculate Your HST?


With this method, you need to capitalize on the back of the envelope calculation to know your HST remittances or GST remittances applicable to you. You do not need to record or report the actual HST paid or payable on most of your purchases with this accounting method.  It is the most convenient and the simplest method to know your HST and file it without worrying much about the figures. You also save money on tax remittance with this most straightforward and most uncomplicated method as a small-sized business owner. It is the quickest and fastest method for small business owners to calculate GST or HST. You also do not need any GST/HST audit because of the simplicity this method offers you. Always keep your receipts with you if the time comes near to file your HST in Toronto.


Who Cannot Use the Quick Method in Canada?


The following cannot use the quick method to calculate their HST in Canada:


  • People that provide bookkeeping services and financial/tax consulting services in Canada.

  • Persons who render legal, accounting, or actuarial services as their profession.

  • Listed financial institutions, charities, and public institutions.

  • Non-profit organizations with at least 40% government funding in the year.

  • Hospital authorities or facility operators.

  • Municipalities or local authorities (designed as a municipality).

  • Public colleges, schools authorities, or universities.


Conclusion:-


HST filing should be taken care of you on time if you do not want a penalty to be imposed on you by the CRA. Almost everyone has to file HST in Ontario, Canada, with a few exceptions. Ontario's government made HST mandatory to help Canada's economy prosper, although 2020 was not a good sign for Canada's economy. CRA introduced the Quick Method for small business owners to help them calculate their net GST/HST. There are different benefits of this accounting method, but the core benefit is that this method saves time and money. Nonetheless, not every business can use this method and file its HST in Canada.


GTA Accounting is an accounting firm that offers top-notch accounting & bookkeeping services for small business owners in Mississauga, Toronto, and Oakville at a fair price.


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