# Small Supplier Business GST Tax



## Nightravyn (Aug 31, 2016)

Hi there,

I run a small business that would qualify as a Small Supplier, as we only average $10,000 in gross sales per calendar year. However, for some business licensing, etc I had signed up for a GST/HST number with the government. I guess I didn't do my research properly, because I didn't realize that once I had signed up for that number, I was now required to collect GST/HST on all my sales. So I had never collected, or filed as GST/HST return since 2013 (which is when I registered for my tax number). Now, 3 years later, the government sent me a Notice of Re-Assessment, telling me that I owe nearly $4000 for GST/HST returns on my business sales, not to mention several hundred dollars in Arrears Interest and Failure to File penalties because I didn't think I needed to file for GST/HST so long as I qualified as a small business. 

I have only just received this notice of re-assessment today, and it has notices for 2013, 2014 and 2015. I have never received the previous notices for the earlier tax years until now that I know of (I'm pretty thorough with checking my mail and can't imagine I misplaced anything as important as a CRA envelope), so now they are telling me that I will accrue interest "daily" on the total balance owing. 

Wondering if I'm best off paying the $4000 owing, and then somehow trying to convince the government to give that money back, as I have never collected GST/HST on my business sales. Or am I screwed because I registered, so whether I collected the taxes or not, I will need to pay them the amount owing without any recourse?

Thanks for any light you may shed on my predicament.


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## Market Lost (Jul 27, 2016)

Nightravyn said:


> Hi there,
> 
> I run a small business that would qualify as a Small Supplier, as we only average $10,000 in gross sales per calendar year. However, for some business licensing, etc I had signed up for a GST/HST number with the government. I guess I didn't do my research properly, because I didn't realize that once I had signed up for that number, I was now required to collect GST/HST on all my sales. So I had never collected, or filed as GST/HST return since 2013 (which is when I registered for my tax number). Now, 3 years later, the government sent me a Notice of Re-Assessment, telling me that I owe nearly $4000 for GST/HST returns on my business sales, not to mention several hundred dollars in Arrears Interest and Failure to File penalties because I didn't think I needed to file for GST/HST so long as I qualified as a small business.
> 
> ...


If you don't explicitly charge HST then you're assumed to be collecting it as part of the total sales. This notice is known as an "notional" or "arbitrary return." This is done because you haven't filed, and they are just using your T1 to complete the returns. The $4K is rather steep assuming that if you're at a 13% HST this is only 30,000/1.13*13 = $3,451 without input tax credit. If you can use the Quick Method then it will likely be about a third of that. Since you haven't filed already, you should file the returns ASAP, as ITCs can be denied if you wait to long (I think it's 4 years). 

That being said, you should definitely contact the HST office as soon as possible and explain that you are going to file. You may also want to have a answer ready for why you ignored the returns for so long.


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## Nightravyn (Aug 31, 2016)

Market Lost said:


> If you don't explicitly charge HST then you're assumed to be collecting it as part of the total sales. This notice is known as an "notional" or "arbitrary return." This is done because you haven't filed, and they are just using your T1 to complete the returns. The $4K is rather steep assuming that if you're at a 13% HST this is only 30,000/1.13*13 = $3,451 without input tax credit. If you can use the Quick Method then it will likely be about a third of that. Since you haven't filed already, you should file the returns ASAP, as ITCs can be denied if you wait to long (I think it's 4 years).
> 
> That being said, you should definitely contact the HST office as soon as possible and explain that you are going to file. You may also want to have a answer ready for why you ignored the returns for so long.


Since the registration, we've been located in Alberta, so even if we had been collecting tax, it would have just been the 5% GST in Alberta. However we've been accrue'ing interest every month since 2013 on the initial return, and of course since 2014, and so on for the other 2 years. As for why we ignored the returns, we didn't know we had to submit a GST/HST return, ignorance is obviously not something the government is just going to accept, but we also never received any previous re-assessment notices.

Is there any way to prove the previous 2 years of re-assessment notices never made it to us, to avoid having to pay the failure to file, and accrued interest charges since we had no idea we had missed filing anything?

Also, to rely a bit on others expertise, best phone # to call to get in touch with someone who will be able to help us with submitting payment, and as well filing? Not even sure what forms we need to fill out in order to file our GST/HST returns? 

Thanks so much for the reply!


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## Market Lost (Jul 27, 2016)

Nightravyn said:


> Since the registration, we've been located in Alberta, so even if we had been collecting tax, it would have just been the 5% GST in Alberta. However we've been accrue'ing interest every month since 2013 on the initial return, and of course since 2014, and so on for the other 2 years. As for why we ignored the returns, we didn't know we had to submit a GST/HST return, ignorance is obviously not something the government is just going to accept, but we also never received any previous re-assessment notices.
> 
> Is there any way to prove the previous 2 years of re-assessment notices never made it to us, to avoid having to pay the failure to file, and accrued interest charges since we had no idea we had missed filing anything?
> 
> ...


If you're in Alberta then $4K on $30K of sales before taxes and penalties is impossible, so I'm not really sure how they calculated it, but this is what they do. From experience, it's more than likely that this is the first year they performed a notional return on you. Even if this weren't the case, they wouldn't forgive the interest and penalties just because you didn't receive them as the onus is on the business owner to ensure they contact CRA if they don't receive a Notice of Assessment. Sorry to tell you this.


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## Nightravyn (Aug 31, 2016)

No need to apologize, I need the truth and as much information as people are willing to offer. Got myself into this mess, just hoping for a bit of tips and guidance to help me get it taken care of. Is there somewhere I can attain the forms I need to file my GST/HST return and file it with the government sooner rather than later to avoid more interest? All I've found is an ordering page that will have them mail me GST62 - Goods and Services Tax/Harmonized Sales Tax Return (Non-Personalized), though I'd rather not have to wait for Canada Post to get that to me, then fill it out and mail it back in while interest accrues daily.


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## Spudd (Oct 11, 2011)

http://www.cra-arc.gc.ca/esrvc-srvce/tx/bsnss/fl-gsthst-tpstvh-eng.html

Try this - seems like you should be able to file electronically using "My Account".


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