Useful Information from R&D Tax & Accounting Services
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As a GST/HST registrant, you are likely familiar with your responsibility to collect, report, and remit GST/HST on taxable supplies. But, did you know that you are required to file a GST/HST return with the Canada Revenue Agency (CRA), even if you do not have any GST/HST to report or remit for a particular filing period? That means if you temporarily stop your business, you still need to file your GST/HST returns.
If you have not filed your GST/HST returns, any refund or rebate you are entitled to will be held until we receive your required returns. This includes your T2 corporation income tax refund if you are a corporation, and your T1 personal income tax refund if you are a sole proprietor or partnership.
It’s important to keep your taxes on track to receive the refunds and rebates you’re entitled to receive, when you’re expecting to receive them.
Mary and Joe Brown own a computer business with 2 employees. Mary completes the bookkeeping and assists Joe as a computer tech. They opt to remit HST quarterly. Mary has minimal bookkeeping experience and completes the books once a quarter. Joe and Mary purchase computer inventory whenever necessary and make large shareholder withdrawals. At the end of the quarter, Mary realizes that they do not have the funds necessary to pay the Receiver General so she neglects to file the HST. The Receiver General sends the business a notice and Mary netfiles the first and second quarter. Mary realizes that due to the large inventory and shareholder withdrawals, the business does not have the funds to pay the trust monies (HST), interest and penalties.
In the above scenario, Mary and Joe are spending Trust Funds and placing their business in jeopardy.