The Business Owner’s Guide to HST Management in Ontario

office worker managing business hst accounts

Harmonized sales tax (HST) is a merged tax that combines the Canadian Goods and Services Tax (GST) and the Provincial Sales Tax (PST), which is prevalent in several provinces, including Ontario, where it stands at 13%. This guide provides an essential understanding of HST and its implications for businesses operating within the province. From registration to compliance, we cover the critical steps to manage this tax efficiently. By the end of this guide, you will know how to get an HST number in Ontario and utilize it effectively for your business operations.

Exploring Harmonized Sales Tax in Ontario: Impact and Compliance For Businesses

Harmonized Sales Tax (HST) is a unified tax that combines the federal Goods and Services Tax (GST) with the Provincial Sales Tax (PST), applicable to a wide range of goods and services across Ontario. The HST rate in Ontario province is set at 13%, with a breakdown of 8% provincial and 5% federal components. 

Comprehending the implications of HST is vital for precise pricing, accounting practices, and business regulatory compliance. Every business conducting taxable sales must register for an HST number in Ontario, ensuring they can properly charge, collect, and remit the HST through their GST/HST account. Understanding HST’s structure and impact is essential for maintaining fiscal health and compliance in Ontario.

Get a more detailed overview of What is Harmonized Sales Tax.

How to Get HST Number in Ontario?

Applying for an HST number in Ontario is critical for businesses surpassing or expecting to surpass $30,000 in annual sales. To register for an HST number, business owners should visit the Canada Revenue Agency’s (CRA) website or utilize services like Ontario Business Central, which simplifies the process. Here’s a direct approach:

  1. Gather Necessary Information: Before applying, ensure you have your business identification details, including your business number (BN), if you have already obtained them.
  2. Choose Your Application Method: You can apply online through the CRA’s My Business Account, by mail, or by phone. Ontario Business Central also offers direct assistance with a tax online application.
  3. Complete the Application: Fill out the required fields accurately to avoid delays. This includes your business type, financial year-end, and projected sales.
  4. Submit and Confirm: Once submitted, you will receive your HST number. Keep this number for the HST number lookup in Ontario.

By following these steps, you can efficiently secure your HST number in Ontario and ensure compliance with tax collection and remittance requirements. 

How To File Your HST Returns?

Filing HST returns in Ontario is an essential process for businesses registered for HST. This ensures that the Harmonized Sales Tax collected from customers is accurately reported and remitted to the Canada Revenue Agency (CRA). Here’s how to manage this responsibility:

  1. Determine Your Filing Frequency: Depending on your business’s revenue, decide whether to file annually, quarterly, or monthly. This affects how often you need to report and pay the HST collected.  Most commonly used is the quarter filings.
  2. Collect Necessary Documentation: Gather all sales invoices and receipts that involve HST collection and records of HST paid on business-related purchases.
  3. Calculate Net Tax: Subtract the total HST paid on purchases (input tax credits) from the HST taxes you collected from customers. This figure represents the net HST amount to be remitted.
  4. Complete the HST Return Form: Fill out the GST/HST return form provided by the CRA, either electronically through the CRA’s My Business Account or on paper.
  5. Submit and Remit the Due Amount: Ensure you submit your completed GST/HST return by the deadline and remit any amount owed. Late submissions can result in penalties.

Following these steps will help maintain compliance with Ontario’s tax laws and keep your business in good standing. For more you can read the Business Owners Guide to Remitting and Collecting HST Tax .

register a tax account

Efficient Strategies For Remitting HST Returns in Ontario

Remitting HST returns properly is crucial for businesses in Ontario to ensure compliance with tax regulations. Once you have calculated the net HST due (the amount of HST collected minus any Input Tax Credits you’re entitled to), it’s time to remit this balance to the Canada Revenue Agency (CRA). Here’s a streamlined approach to effectively manage and remit GST/HST for businesses:

  1. Prepare the Payment: Ensure the total amount due is accurate and all supporting documentation is in order.
  2. Choose Your Payment Method: You can remit HST using several methods. These include making payments online through the CRA’s My Business Account, at your bank, via telebanking, or by mailing a cheque to the CRA.
  3. Submit Through the Appropriate Channel: Use the CRA’s GST/HST NETFILE system to submit your HST returns electronically. This system is accessible to those with an HST number registered for electronic filing.
  4. Keep Records: Maintain copies of your HST filings and proof of payment for at least six years in case of audits or disputes.

Maximizing Compliance With HST Registry Search Tools in Ontario

Using HST registry search tools is essential for ensuring compliance and maintaining business transparency in Ontario. These tools allow you to check the validity of HST numbers, confirming that you are engaging with registered, compliant businesses. This verification helps safeguard your transactions against potential tax errors and fraud. By routinely using these resources, you can ensure all dealings are with entities that are up-to-date with their HST obligations, promoting a trustworthy business environment. Such practices are crucial for anyone needing to verify HST registration status within the Ontario business landscape.

Addressing Frequent Queries About HST in Ontario

Many businesses have questions regarding HST management in Ontario, including:

  • What if my business does not exceed $30,000 in sales annually? You are not mandated to get GST/HST registration. However, voluntary registration is available and can be beneficial for reclaiming Input Tax Credits on business-related expenses.
  • How often should I file GST/HST returns? The frequency of filing GST/HST returns can vary; you can file monthly, quarterly, or annually, depending on what best suits your business needs.
  • Can I reclaim the HST paid on business expenses? Yes, you can reclaim HST paid on eligible business expenses through Input Tax Credits when you file your GST/HST return, reducing the total amount of HST you owe.
  • What is HST in Ontario? HST in Ontario is a blended tax that combines the federal Goods and Services Tax (GST) with the Provincial Sales Tax (PST), applied to most goods and services sold or provided in the province.
  • How much is HST in Ontario?The HST rate in Ontario is currently set at 13%, which includes an 8% provincial portion and a 5% federal portion.

Simplify Your HST Management With Ontario Business Central

Effectively managing Harmonized Sales Tax (HST) is essential for any business in Ontario. The staff at Ontario Business Central streamlines this process, offering the necessary tools and guidance to ensure adherence to provincial tax laws. Whether you need to register for an HST number due to your business exceeding $30,000 in sales, accurately file your HST returns with options for monthly, quarterly, or annual filings, or use HST number lookup tools to verify compliance and maintain transparency in transactions, Ontario Business Central is ready to help. Additionally, they support businesses in ensuring that HST collected is correctly calculated and remitted. Start today with Ontario Business Central to ensure your business complies with and excels under Ontario’s HST regulations, effectively managing how you pay GST/HST and other taxes.

Contact Ontario Business Central for expert assistance with HST registration and management. Simplify your tax responsibilities and focus on what you do best – running your business.

inquiries@ontariobusinesscentral.ca
Toll-Free: 1-800-280-1913
Local: 1-416-599-9009
Fax: 1-866-294-4363
Office Hours: 9:00am – 5:00pm
Monday – Friday E.S.T.

Ontario Business Central Inc. is not a law firm and cannot provide a legal opinion or advice. This information is to assist you in understanding the requirements of registration within the chosen jurisdiction. It is always recommended, when you have legal or accounting questions that you speak to a qualified professional.