GST/HST Registration: A Comprehensive Decision-Making Guide for Canadian Health Professionals
Understanding GST/HST Registration
If you’ve been contemplating GST/HST registration lately, keep reading, as this blog aims to demystify your decision-making process about this form of sales tax. It actually stands for Goods and Services Tax (GST) and Harmonized Sales Tax (HST).
While many health professionals in Canada are exempt, there are benefits and considerations when it comes to tax obligations that you should understand before making your decision. This blog will help you understand how it impacts your practice, and provide a handy checklist.
Download this FREE GST/HST guide to learn the things you wish you were taught at school. It’s quick, it’s easy to follow, and it’s just enough to help you take control of your finances.
Key Factors Influencing GST/HST Registration
One of the key factors for health professionals to consider when deciding on GST/HST registration is timing. You could register when you reach the $30,000 threshold or register early to save on time and admin later on.
Also, consider what your business goals are as a health professional. Do you want to meet tax compliance requirements, or are you looking for ways to save money and boost cash flow? These key factors will influence your decision and talking to an experienced accountant will help make it much easier.
Who Needs to Register for GST/HST?
According to GST/HST registration criteria, health professionals who reach specific thresholds of taxable sales need to register. If you earn over $30,000 in a single calendar quarter or over four consecutive calendar quarters, you are no longer a small supplier and GST/HST registration is mandatory. Note that a calendar quarter is a period of three months beginning on the first day of January, April, July, or October each year.
Get more details on thresholds for registration that apply to health professionals here.
Benefits of Registering for GST/HST
Even though most health professionals are exempt from this sales tax, if you have any taxable sales you can still register to gain the benefits of GST/HST. Below are some of the benefits for health professionals:
Reduce your tax liability by claiming Input Tax Credit for purchases made for your business. If you don’t register and charge GST/HST, you can’t claim these benefits. Note that this only applied if taxable sales are more than 10% of your total revenue profile.
Boost cash flow for your health business by charging GST/HST on sales of taxable supplies at your health practice.
Since GST/HST gives you the option to claim back for business purchases, this means you won’t spend more than you make at your health practice, and you have more control over your finances.
Another benefit of GST/HST registration for health professionals is that it makes your clinic seem more professional and some clients prefer this. You may enjoy the competitive edge.
Maintain accurate records that will make financial reporting easier and provide financial clarity all year round.
Drawbacks of Registering for GST/HST
Now that you know the pros, it’s important to be aware of the GST/HST drawbacks before making a decision that will affect your business now and in the future. Below are some of the common challenges that come with GST/HST registration:
Increased administration and compliance costs.
Complex to understand and navigate (Filing errors, beware!).
Requires meticulous record keeping, leading to more time and administrational duties.
There are severe penalties in cases of non-compliance.
But don't let these GST/HST drawbacks discourage you completely. Remember that professional bookkeeping and accounting services are available from Tyagi Group Accounting to help you get over those administrational hurdles, explain complex terms and avoid penalties.
Decision-Making Tool: Should You Register for GST/HST?
This is exactly the decision-making tool you’ve been waiting for to ease you through this important decision. By combining our expert advice with this tool, Tyagi Group is empowering health professionals to feel more confident in their financial planning.
Checklist for GST/HST Registration
So here’s the big question: Should you register for GST/HST or not? You’ve seen the benefits and the drawbacks, but you may still feel a little undecided. We’ve prepared this go-to GST/HST checklist for health professionals to help make things crystal clear before you go ahead with your registration.
Are you a small supplier?
Is taxable revenue at your health practice more than $30,000?
Do you spend alot on supplies and do you wish to claim some of that money back?
Do you have the personal capacity or a fractional accountant to assist with managing your GST/HST obligations?
If you’ve answered yes on all questions, you’re ready for GST/HST registration!
How to Register for GST/HST
The GST/HST registration process is not as complicated as most health professionals think. Follow this step by step guide to make sure you get it right. (Of course, Tyagi Group is just a call away if you have questions!) Check out this blog for more registration details.
Find out if you’re eligible for GST/HST.
Register for a Business Number (BN) with the CRA online by phone or by mail, and store it safely for reporting and remittance purposes.
Gather your business name, business number, contact information, and the total amount of revenue from taxable and zero-rated sales within Canada and have this information ready.
You can now register for GST/HST with the CRA. If you have a SIN (social insurance number) that starts with the number 9, you can use the Business Registration Online service to register and instantly obtain a business number and a GST/HST account.
Managing GST/HST Obligations
Once you’ve officially registered for GST/HST, managing your obligations will be paramount. Health professionals often forget to do this and are met with chaos during tax season. We’re here to protect you from mismanagement through accurate information and tips for best practice. Consider the following steps to managing your GST/HST obligations:
Keep accurate records of all GST/HST paid for and charged, along with receipts, invoices and other supporting documents.
Report and file returns on time and remit the correct amount to avoid penalties. Deadlines are detailed here.
Ask an accountant to help you prepare for potential audits so you remain compliant.
How Tyagi Group Can Help
Tyagi Group Accounting has years of experience in providing GST/HST assistance to health professionals specifically. Our company was founded as a boutique agency with a focus on the health industry because we wanted to reverse the feeling of confusion and financial illiteracy that many clinic owners were faced with.
We offer personalized consultations and holistic financial advice and GST/HST assistance for health professionals who want to make informed decisions for a sustainable business future. We also offer professional bookkeeping and tax accounting to help you with GST/HST management once you’ve registered.
Making an Informed Decision on GST/HST Registration
By following these guidelines, you will be able to make an informed decision when it comes to GST/HST registration for health professionals.
Key points to remember:
Consider your quarterly taxable revenue and business goals before deciding on GST/HST registration.
Weigh up the cash flow benefits against administrative challenges for your health business.
Use Tyagi Group’s easy decision-making tool to guide your decision.
Registration is easy, but be sure to manage your GST/HST account properly to maximize savings and reduce stress.
Ready to enhance your health business with GST/HST registration? Sign up for our GST/HST webinar for health professionals to have all your questions answered.
