John Douglas Business Solutions Inc.

Discover The Top 5 HST Mistakes Auditors Find
     John D. McQuarrie

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FAQs   arrow

A. Books & Records
B. Business Numbers & HST Registration
C. Audits
D. HST Collectible
E. Input Tax Credits

A. Books & Records

1. How long do I need to keep my records?
2. What records do I need to keep?
3. What happens if I forget to back up my records or if my computer crashes?
4. I’m being audited. Do I have to provide the auditor with everything?
5. The auditor told me my records were inadequate. What are the consequences?
6. Do I have to keep all this paper?
7. If my records are all electronic, can I just keep my G/L?
8. I am moving, do I have to take my records with me?
9. When can I destroy my records?
10. Are the rules for keeping HST records the same as the general rule?

B. Business Numbers & HST Registration

1. What is a Business Number (BN)?
2. What is the significance of the parts of the BN?
3. How do I get a BN?
4. Do I have to register for GST/HST?
5. Should I Register? Or, Do I Have a Choice?
6. What is a Small Supplier?
7. Why would I register if I don’t have to?
8. Are there advantages NOT to register?
9. Do I have a choice on how frequently I file my HST returns?
10. Can I access my Business Number account activity on-line?

C. Audits

1. What Triggers an Audit?
2. I’m Not Asking for a Refund. Why Would they Pick My Company?
3. What Do Auditors Look For?
4. I don’t think that my Company is exposed to unremitted taxes or over-claimed input tax credits. What else does CRA consider a high risk area?
5. How many years does an auditor investigate?
6. Is an auditor able to assess based on a sample and/or extrapolation techniques?
7. Do I have to provide anything and everything that the auditor asks for?
8. I have heard that an auditor audits to “net tax”. What does that mean?
9. What is a “Wash Transaction”?
10. When Can a Wash Transaction be Applied?

D. HST Collectible

1. My supplier didn’t charge me HST but he should have. Am I liable to pay it?
2. If my supplier charged me HST but it was later discovered that he did not remit it to the government, do I have to pay the HST?
3. Are there any purchasers who do not have to pay HST?
4. My Customer would like to be invoiced in U.S. Dollars. How much HST do I charge?
5. Do I have to charge HST on inter-corporate management fees?
6. Which rate do I charge on inter-provincial transactions?
7. We sell gift packs with taxable and zero-rated goods? What rate do I charge?
8. My company is a Canadian holding company. We hired a consultant from New York. Do I have to self-assess HST on this service?
9. Can I charge HST on the entire invoice and make the “rounding” calculation at that point?
10. With the phasing out of the Penny, I heard that the price I pay for something could be different depending on whether I use cash or credit, debit or some other payment method. Is this true?

E. Input Tax Credits

1. What evidence do I need to recover the HST I paid?
2. How can I make sure that my vendor is really registered to charge me HST?
3. What if lose my “documentation”?
4. I have heard that not all HST paid is recoverable. Why are some of these payments of HST “restricted”?
5. Why is HST sometimes “recaptured”? Do I have to repay some of the HST I recovered?
6. Is it true that I don’t get back all the HST I spend on Meals & Entertainment?
7. I receive an allowance from my employer for travel costs. Does my employer recover some HST from my allowance?
8. I am reimbursed for expenses I incurred personally on behalf of the Company. Who gets to recover the HST?
9. Is it true that if my business is “large”, I do not receive input tax credits on some of my Company’s purchases?
10. What are some of the more common input tax credits that auditors disallow?

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