How you can save money and time on GST - Quick Method

If you are small business owner whose revenue is less than 400K per year you can choose a different method called Quick Method for GST filing.

This method can save you money and time if you have little or minimal expenses that are subject to GST. For example service providers like realtor, IT professionals. consultant. It saves paperworks and your time too.

Here is how it works:

You still collect 5% on your sales but instead of sending in all 5% if the GST you collect less the input tax credits ie GST you pay, you send in 2.6% of the first $30,000 of gross revenue and 3.6% of the gross revenue after that (these are rates for BC service providers)

You don’t claim any GST paid on on expenditures. However, if you purchase a capital asset, like a vehicle or piece of equipment, you are still able to claim the ITC on these purchase.

Exceptions: Business types that cannot use the quick method:

• persons that provide book-keeping, financial consulting, tax consulting or tax return preparation services in the course of the person's commercial activity

• persons that provide legal, accounting or actuarial services in the course of their professional practice

• listed financial institutions

• charities

• public institutions

• non–profit organization with at least 40% government funding in the year (qualifying non–profit organizations)

• municipalities or local authorities designated as a municipality

• public colleges, school authorities, or universities, that are established and operated other than for profit

• hospital authorities, facility operators, or external suppliers

This method has saved many of my service providers clients who have high revenues but little expenses thousands of dollars! Contact me if you need help with this!