Quick Method for Filing HST/GST Returns

By seiyone | Oct 30, 2023

Have you been spending way too much time filing your HST/GST returns? CRA has a solution for all small business owners!

To start off, what is an HST/GST return/credit? Canada’s Revenue Agency says that “The goods and services tax/harmonized sales tax (GST/HST) credit is a tax-free quarterly payment that helps individuals and families with low and modest incomes offset the GST or HST that they pay.” With this being said, this credit may take too long to file for many small business owners… and here’s the solution!

The quick method of filing HST/GST income tax returns is a method afforded by the CRA for small service businesses with relatively few expenses. Businesses can use the quick method if taxable sales for the fiscal year are under $400,000.

Generally, businesses can claim “input tax credits” (ITCs) to recover GST or HST that you pay on your purchases. This amount is then deducted from the GST/HST billed to the business’ clients, and the difference is remitted to the CRA as your “net tax”. However, under the quick method, businesses need to only remit a portion of the tax collected, to the CRA.

In Ontario, the HST rate is 13%, and the remittance is 8.8% minus $300. Therefore, if an Ontario business were to bill its clients $100,000 for its services, plus 13% HST, and had expenses of $5,000 plus 13% HST, the business’ regular GST/HST remittance for the year would be $13,000 minus $650, which is $12,350.

However, if you use the quick method, you need to only remit 8.8% of $113,000, minus $300, equaling $9,644. This results in a savings of over $2,700.

As with anything related to tax, there are several exceptions and exclusions that apply to using the quick method for HST/GST credit filing.

For all inquiries/questions regarding the quick method, please call Senathi & Associates at (416) 479-0600 or email us at info@gtacpa.ca, and we’d be happy to answer any of your tax-related questions!