Navigating GST/HST: Essential Tips for Canadian Health Professionals
Understanding GST/HST for Health Professionals
As a Canadian health professional, you may not have considered GST/HST until now. And who could blame you? While many healthcare services are exempt, understanding it is crucial for health professionals to correctly fulfill tax obligations, avoid penalties, and ensure financial compliance.
Consider this blog as your all-inclusive guide to managing GST/HST obligations. It’s exactly what every health professional in Canada has been waiting for.
Coming up…
Understanding GST/HST for Health Professionals
Key GST/HST Considerations for Health Professionals
How to Register for GST/HST
Best Practices for Managing GST/HST
Common Mistakes to Avoid
GST/HST Filing and Payment Deadlines
How Tyagi Group Can Help
Ensuring Compliance and Efficiency
Eager to get a head start? Download this FREE GST/HST guide, which details everything new health professionals need to know about registering early.
Key GST/HST Considerations for Health Professionals
Let’s take a look at some of the key GST/HST considerations for health professionals. These will influence your decision about whether or not to charge this form of sales tax and when to start. Once your business passes the small business threshold and starts generating more than $30,000 of taxable sales per year, you are required to charge GST/HST.
If you never reach that figure, you don’t have to register. If you expect your business to grow quickly, it’s advisable to register for GST/HST early to get this task out of the way. All GST/HST paid will be fully refunded to you. Some other key factors to consider are that your admin will increase with this form of tax registration and some clients may even expect it.
Read more on important considerations here.
GST/HST Exemptions for Health Services
Before making the decision to register, take note that there are some GST/HST exemptions when it comes to health services. If you are exempt, it means you don’t charge the sales tax and you don’t claim Input Tax Credits (ITCs).
According to the CRA, most health, medical, and dental services performed by licensed physicians or dentists for medical reasons are exempt from GST/HST. However, these are purely medical services, so if you provide a cosmetic procedure or group programs, for example, this would not be one of the GST/HST exemptions.
If your medical practice earns less than $30,000, you are also exempt. However, regulations can change over time, like the new impact to mental health in June 2024, so to know your tax implications, seek advice from an experienced chartered accountant.
How to Register for GST/HST
GST/HST registration is quite straightforward, but it’s our job to empower you with information you don’t have time to research. Here is a step by step guide to help busy health professionals get it done seamlessly:
Determine if you are eligible for GST/HST registration
Get a Business Number (BN) from the CRA. If you are incorporated, you may already have one.
Prepare documents: business name, business number, contact information, and the total amount of revenue from taxable and zero-rated sales within Canada.
Register online here and you will be given a reference number and a registration package.
Best Practices for Managing GST/HST
You’re great at what you do, and your business finances need to reflect that. Uphold best practices with these tips for GST/HST management for health professionals. These simple steps will ensure you have clean, error-free books, a business that meets compliance requirements, and zero stress.
Keep accurate records: Keep track of all purchase and sales transactions and retain receipts and invoices to make filing a breeze and to support ITC claims.
File returns on time: Be aware of reporting and filing deadlines and file your returns with the CRA, paying attention to all filing requirements.
Claim ITCs: Claiming ITCs can reduce your tax liability and boost cash flow with a refund for your GST/HST paid on business expenses.
Common Mistakes to Avoid
There are a few common mistakes that health professionals make when it comes to GST/HST, so we’re helping you avoid them by being aware of what to do and what NOT to do.
Mistake 1: Not filing GST/HST returns on time.
Diarize your filing deadlines and stick to them to avoid penalties. It helps to consult a tax accountant who can give you correct information about when to file and help you prepare.
Mistake 2: Not keeping accurate records.
This becomes a nightmare when it’s time to file and may also prevent you from claiming returns for GST/HST paid. A slick bookkeeping process will ensure you have easy access to documents when you need them and save more in the long-term.
GST/HST Filing and Payment Deadlines
Health professionals fall into two categories for filing GST/HST returns: monthly and quarterly filers and annual filers. If you have a monthly or quarterly reporting period, your GST/HST filing and payment must be done 30 days after the end of your reporting period.
Businesses with an annual reporting period must do so within three months after the fiscal year-end. To give your health business the real care and attention it deserves, try to fulfill these important filing and payment requirements and keep nasty penalties far out of your radar.
See more about the CRA’s GST/HST deadlines here.
How Tyagi Group Can Help
Tyagi Group is the best choice to give health professionals like you GST/HST assistance, since we’re a boutique agency that specializes in the health industry. Our team not only brings a wealth of accounting knowledge and experience to the table, but we have deep insight into what health business owners need, their specific industry regulations and challenges, and can provide really tailored financial advice.
Forget confusion and start managing your GST/HST obligations with confidence after taking our empowering courses, consulting our experts, or using our online resources.
Ensuring Compliance and Efficiency
Embarking on your journey as a new health professional is exciting, but ensuring compliance and efficiency in GST/HST management are key. The good news is that Tyagi Group can assist you all the way, so you can focus on running an exceptional business.
Key takeaways:
Consider if you’re eligible for GST/HST or would like to register early.
Most health services are exempt or will have a zero-rated sales tax.
Registering and managing your GST/HST is easy with Tyagi Group.
Avoid common mistakes and file on time to reduce costly penalties.
Tyagi Group offer specialized courses, resources and consultations in GST/HST for health professionals.
Get all your GST/HST questions answered! Register for our comprehensive GST/HST webinar using the link below. Feel free to book a discovery call if you’d prefer a one-on-one chat about your GST/HST management needs.
