You passed $30,000 and never registered for HST. What does CRA do?

A small supplier is not required to register for GST/HST until taxable supplies cross $30,000. The test is not a casual calendar-year feeling. You cease to be a small supplier if taxable supplies exceed $30,000 in a single calendar quarter, or if they exceed $30,000 over four consecutive calendar quarters. In the one-quarter case, you generally stop being a small supplier at the moment you cross the line. In the four-quarter case, you generally stop being a small supplier at the end of the month after the quarter in which you went over. From that point the supplies are taxable. If you never registered and never charged HST, CRA can still backdate the registration and assess the tax on those sales.

That is the painful version. The tax comes out of the money you already collected as if it included HST, unless you can still collect it from the customer, which years later you usually cannot. Taxi and commercial rideshare operators generally have to register even below $30,000. Do not use the small-supplier shelter for those businesses. Do not apply that exception to every other trade either.

How to measure the threshold without fooling yourself

Use taxable supplies, not profit, and not deposits that are transfers.

• Add revenue that was taxable. Do not subtract expenses. The test is supplies, not income.
• Use a rolling four-quarter window, not just 1 January to 31 December, when you are near the line.
• A single big quarter can cross the line immediately, even if the year would have looked small.
• Associated persons can be a problem. Splitting sales across two sole props you control does not reliably create two $30,000 shelters.
• Once you are registered, or required to be, nil periods still need returns.
• Input tax credits may offset part of the assessment, subject to the time limit. Many small businesses have four years. Some registrants have two. Do not assume every old receipt still counts.

Register, then file the back periods

The longer the registration is delayed, the more quarters of tax sit on revenue you spent. Tax Everyday will measure the threshold from your sales list and quote the HST returns. This work is not the $90 personal return. If you are a sole proprietor, the ready personal year with the business is $650 plus HST, and the HST registration catch-up is quoted beside it. A corporation’s ready year, with HST support, is $2,000 plus HST when the records are in shape.

Drop a quarterly sales total for the last four years if that is all you have. A quarterly total is enough to see whether the line was crossed. It is not enough to file, but it is enough to start.