If you have received mail from the Canada Revenue Agency (CRA) regarding previously filed GST returns it is likely part of their GST compliance campaign.
In December 2016 and March 2017, the Canada Revenue Agency (CRA) launched a pilot project GST compliance campaign and sent over 750 letters to businesses registered for GST/HST. The letter asked businesses to review amounts filed on prior period GST returns and confirm whether the amounts were correct, or make changes if necessary.
CRA plans to send another 2,500 letters in September 2017
The letters were mailed to those suspected of having errors on their GST returns and were selected based on an expected level of risk. Another 2,500 letters were mailed in June 2017 and there are plans to send another 2,500 in September 2017.
If you received this letter and would like to make an adjustment to a previously filed GST/HST return:
- Note that you have 45 days to do so.
- Adjustments can be submitted by KWB or made online if you have access to CRA’s My Business Account.
- A written request can also be sent to your applicable CRA Tax Centre. The request must include your GST/HST number, the reporting period, the amended line numbers, contact information and a signature from someone who is authorized on the account.
- You may want to go through the Voluntary Disclosures Program, which allows you to correct information without penalty or prosecution. Note that this program is only available under certain circumstances, so check here for more information before going this route.
If you are preparing your own GST/HST return, here are some things to keep in mind:
- The CRA has a guide (RC4022 General Information for GST/HST Registrants) that will help you determine what needs to be included on a GST/HST return.
- Not all items have GST/HST charged on them. Expenses such as insurance and bank charges are considered exempt as they are a part of the financial services industry. Be sure to check your receipt to see if tax has been charged before claiming it as an expense.
- Some receipts only show a total that includes GST. Parking receipts are a good example where a $20 charge will include: $19.05 for parking and $0.95 in GST at 5%.
- If you miss an expense that you would like to claim as an Input Tax Credit (ITC), you have four years to claim it, unless your revenues are over $6 million, in which case you have only 2 years. You do not need to go back and amend a previous return. It can be claimed in the next period as long as it is within the four year time limit.
If you would like more information or have any questions, feel free to contact us at 780.466.6204, or click here to send us an email.
Thanks to Stephanie Kwan of KWB Chartered Accountants for providing this content.