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Canada GST to HST Ontario

Discussion in 'Business Fundamentals' started by Bajak, Mar 26, 2009.

  1. Bajak

    Bajak Senior Member
    Messages: 999

    There is talk of Ontario introducing HST. I am just looking for insight on how this will affect our service industry here in Ontario. Will this mean we will be charging customers 13% HST instead of the current 5% GST ? Will we be able to re-coup some of that money at tax time as we can now with GST?

    Any insight from members in other Provinces here that currently deal with HST ?

    Opinions from Ontarians good or bad.:confused:
     
  2. Triple L

    Triple L PlowSite Fanatic
    from Canada
    Messages: 5,988

    i dont know much, but i think this is the stupidest thing ever.... a $36 lawn cutting cost the customer about $38... now all suddon when they get the bill its gonna be almost $42 per cut... all they see is the bottom number...and even tho im only getting my $36 they now think there paying about $5 per cut more...Thats Nutz! Just more of a market for the lowballers that make under 30K that dont have to charge tax....
     
  3. Kunker

    Kunker Member
    Messages: 96

    All I hear is that "the HST will be better for businesses", so I presume that the HST will work like the GST right now. Explaining it to clients is going to be fun...I wonder how many will expect an 8% cut in price?
     
  4. Bajak

    Bajak Senior Member
    Messages: 999

    From the GRC site

    "Registrants collect the GST/HST on most of their sales and pay the GST/HST on most purchases they make to operate their business. They can claim a credit, called an input tax credit (ITC), to recover the GST/HST they paid or owe on the purchases they use in their commercial activities."

    Will this mean a 13% ITC on purchases? That's not bad.

    On the other hand, the price of trucking will be up 8% which was the argument used against carbon tax.
     
  5. cet

    cet PlowSite Fanatic
    Messages: 7,202

    This is going to drive the underground economy even more. The homeowner wanting snow and grass services will be even more willing to pay cash.
     
  6. dellwas

    dellwas Senior Member
    Messages: 369

    Yup, that's what I do here in Nova Scotia. I've got a GST tax number/business number. You have to be federally registered in order to claim an ITC. Feds send me the form Late November, early December. I put down total sales, GST collected, and purchases (ITC). Purchases have to fall into specific categories, not all purchases can be claimed. Basically, if you pay more out in GST for purchases than what you collect from sales, then you get a refund based on sales vs purchases. If your sales are higher then you deduct what you purchased and remit the difference. It's important to note that this is not done with your regular Income Tax form, it is seperate.

    This might help explain it further:

    http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/bspsbch/itc-cti/hwt/menu-eng.html

     
    Last edited: Mar 26, 2009
  7. Bajak

    Bajak Senior Member
    Messages: 999

    Dellwas
    How did/do your customers take to being charged the extra tax?
    Also, because of the extra percentage on ITC did you adjust your hourly rates a little lower or keep them the same?
     
  8. dellwas

    dellwas Senior Member
    Messages: 369

    It's nothing new for us in Nova Scotia, we've had the HST (Harmonized Sales Tax) for a long, long time,and NS is one of 3 provinces that do it, so my customers are used to it.

    As far as rates, there are two ways you can do it legally under Federal rules. You can either break it down (cost + HST), or include it with the total cost (don't have to show it). If doing the latter you must indicate that HST is included on the invoice (I do it in great big red letters). You also have to include your GST number on the invoice. For a while I used to break it down, but now I include it in the cost, makes it a little easier at tax time

    Here's another link from Canada Revenue Agency that explains the in's and out's of setting up a busines (Federal perspective) for anyone that's interested:

    http://www.cra-arc.gc.ca/E/pub/tg/rc4070/README.html

    QUOTE=Bajak;773428]Dellwas
    How did/do your customers take to being charged the extra tax?
    Also, because of the extra percentage on ITC did you adjust your hourly rates a little lower or keep them the same?[/QUOTE]
     
  9. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Sorry for the hijack,but Canada is sounding more like New York everyday with all the taxes!
     
  10. DeVries

    DeVries PlowSite.com Addict
    Messages: 1,621

    You got it wrong Grandview. We don't have a lot of taxes just one big one.LOL
     
  11. Neige

    Neige Sponsor
    Messages: 2,198

    For commercial clients it wont make any difference. For your regular client,(home owner) just wait, they will be pissed. In Quebec we have been charging both taxes for a long time now. So a $300 drive goes up to $338.62 with the taxes. They have become used to it, they may not like it, but accept it. It hurt our business for the first few years. People have only so much disposable income. I am sure most of you increased your prices after last year. Now the cost just went up 8% for your clients with this new tax. They really don't care who's fault it is, they have to pay more. Now are you willing to add the cost of living to your price or just swallow it for a year or two. We finally increased our prices in the third year. We post the cost of the taxes in bold, so they see 38.62 of the price goes to the TAX MAN. What a hair brained scheme, the timing could not come at a worst time for you guys. I feel for ya
     
  12. dellwas

    dellwas Senior Member
    Messages: 369

    Don't know bout stateside, but income tax first reared it's ugly head to raise money for the war effort. Can't remember if it was the First, or Second World War. In any case, it's been with us ever since!

     
  13. Bajak

    Bajak Senior Member
    Messages: 999

    I quote some jobs including tax. I just accepted (verbally) to plow one of my current contracts for the same money next season. Thankfully that particular contract/quote didn't include tax. That situation may have brought about some unnecessary squabbling.
    That seems to be the Canadian way.
     
  14. dellwas

    dellwas Senior Member
    Messages: 369

    Ya, except for the lucky stiffs in Alberta, no provincial sales tax!

     
  15. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    I believe it was the Indians wars when it first started.payup
     
  16. Bajak

    Bajak Senior Member
    Messages: 999

    You mean back when you could buy Manhattan Island for a fist full of beads? ussmileyflag
     
  17. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Yes. And the beads were made out of rubber and bounced!
     
  18. DeVries

    DeVries PlowSite.com Addict
    Messages: 1,621

    Ha HA Ha nice it'll take a while to whip the grin off of my face
     
  19. JD Dave

    JD Dave PlowSite Fanatic
    Messages: 11,046

    You might have more then that to wipe off if GV used the beads. :D
     
  20. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Holy **** JD! Oh wait,is that what your talking about?:eek: