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The GST/HST Survival Guide in Six Acts

I had to make a choice recently. Write this blog or go out to a play I wanted to see. I struggled mightily with choosing between a bit of after-hours writing effort or going to enjoy an evening taking in the thespians. Eventually good work ethics won out, but in a tiny act of rebellion, I decided to frame my blog comments in a theatrical format. So, here are my GST / HST recommendations in Six Acts.

ACT I: The Curious Case of the Missing Registration

Our Protagonist – a thriving small business owner (adept at raking in the dough), sits quietly one early morning enjoying his second coffee. Suddenly, he realizes he should have registered for the GST/HST ages ago. Like many ages ago. Who knew success came with paperwork? Well, for one, the CRA did. If your revenue crosses the magic $30,000 threshold in a year and you don’t register, you’re technically operating outside the law. The curtains could come down on your performance early.

How to Avoid This Comedy of Errors: Register early! If you suspect you’ll hit $30,000 in revenue, don’t wait for your acting coach to whisper it in your ear. Get ahead of the game and register with the CRA before you need to start backpedaling and explaining yourself. ‘Not a good look.

ACT II: The Forgotten Input Tax Credits Farce

Ah, Input Tax Credits (ITCs)—those magical deductions that let you reclaim the GST/HST you paid on business expenses. But wait, where’s that receipt? Didn’t you have it in your pocket yesterday? Losing receipts is the equivalent of throwing money into the wind and watching it dramatically dance away. Only these dancers leave the stage permanently.

How to Keep the Drama Down Low: Embrace digital tools! I like Apps like Expensify™ or Wave™. They help track receipts, and your accountant will love you for it. Remember — all accountants crave receipts. Plus, make it a habit to snap a pic of every receipt before it has the chance to disappear into the desk drawer abyss or find its way into the round filing cabinet.

ACT III: The Late Filing Horror Story

Some people love the adrenaline rush of a deadline. At least the planned ones. And then there are business owners who realize, way too late, that their GST/HST return was due… last week. Or last month. Whoops. Wrong kind of rush. Late filing means penalties, interest, and possibly a stern letter from the CRA that nobody wants to receive.

How to Avoid the Nightmare: Set calendar reminders, use accounting software, or better yet, make peace with automation. Numerous accounting platforms can handle the filing for you, so you don’t have to rely on a questionable memory.

ACT IV: The Incorrect Rate Catastrophe

Not all provinces are created equal—at least when it comes to GST/HST rates. Charge the wrong tax rate, and suddenly, you’re either overcharging customers (cue angry emails) or undercharging (cue the CRA knocking on your door).

The Foolproof Fix: Keep a reference sheet of tax rates for every province where you do business. If you’re selling online, ensure your e-commerce platform automatically adjusts tax rates based on customer location. Easy Peasy. At least it should be.

ACT V: The Not-So-Accidental Tax Spending Spree

You’ve collected GST/HST from your customers, but instead of setting it aside, you (hypothetically of course) used it to cover rent, buy supplies, or finally upgrade that worn and outdated office chair. Then tax time arrives, and the CRA is wondering where their money went. And it is theirs.

The Only Way Out: Treat collected tax like it’s radioactive. That means you do not touch it for any reason! Open a separate business savings account and deposit any collected GST/HST proceeds immediately. That way, when tax season arrives, you won’t be frantically shaking chair cushions for spare change.

FINAL SCENE: The Happy Ending

Avoiding these common GST/HST blunders is easier than you think—register on time, track receipts like a hawk, file promptly, charge the correct rate, and never spend collected tax money. Master these basics, and you’ll be the business owner who laughs in the face of tax season while sipping a well-earned cup of double-double iced coffee.

When the credits roll, you want to know that you have done everything you can to avoid having your BIG SHOW close early without an option for a return engagement. Aren’t happy endings great?