Special - GST is not a joke!
A lot of Canadians are self
employed and not registered for GST.
Let me make it clear that if you
are self employed as a hairdresser, mechanic, house painter, carpenter,
electrician, dry-waller, psychologist, dentist, surveyor, clairvoyant,
realtor, masseuse, call girl, call guy, radio host, actor, bad actor, stand
in, accountant, lawyer, jockey, or any of another thousand self-employed
occupations and expect to "gross" over $30,000, you MUST be registered for
GST and you MUST collect GST.
I have never seen anyone have a
problem with a problem who grossed $32,000 one year but is usually
around the $25,000 range but recently, the CCRA is coming along and issuing
GST bills against people who have been grossing over $30,000 routinely and
have not registered and have not been collecting GST (Goods and Services
Tax).
In these cases, the CCRA assumes that
GST has been collected and issues an assessment for GST on the gross amount.
Therefore, if you have been grossing
$60,000 a year or so, you will receive a bill for 7% of the $60,000 (The GST
which should have been collected). Grossing $40,000 means a GST bill for
$2,800. Of course, there are also interest and penalty charges.
The following arbitrary assessment will
give you an idea and we have three of them in the office at the moment.
All were people who used accountants to do their returns and none of them
were told ABSOLUTELY to register and charge GST. In fact, none of them
remember being told to register at all.
If you are self employed and expect to
gross over $30,000 get registered NOW and start collecting and start filing.
In this case, I expect that we will reduce
the bill from $72,000 down to about $30,000 because there are large input
tax credits available but would you like a $30,000 tax bill for the last ten
years?
The following is a real bill for 1991 to
2001 and of course 2002 is also due now. As an example, in 1991 he grossed
about $65,000 and netted $15,000. He will have input credits for most
of the $40,000 of expenses. Interestingly, two of the three people are
self-employed women.
Canada
Customs and Revenue Agency
Agence des
douanes et du revenu du Canada
NOTICE OF ASSESSMENT
000238
Goods and Services Tax
I Harmonized Sales Tax
RC80 E (00/10)
Notice date
Business Number
May 06, 2003 861xx
95xx RT1001
SURREY BC
V3T 5E1
Attention: Accounts Payable
XXXXXXX XXXXXXXXX
1111 Any Road
North Vancouver
V7K XXX
UNFILED GST/HST RETURN(S)
You have not responded to our requests to file Goods and Services
Tax/Harmonized Sales Tax return(s) as required under the "Excise Tax Act".
As a result, under subsection 299(1), we have estimated the tax you owe.
This assessment is not a substitute
for the unfiled return(s). You still have to file the return(s) and pay all
amounts
Reporting period
Net Tax Interest
Penalty
Total
From. To (YYYY/MMIDD)
|
1991/01/01-1991/12/31 |
4,209.10 |
4,284.29 |
5,601.74 |
14,095.13 |
|
1992/01/01-1992/12/31 |
4,543.00 |
3,795.34 |
5,074.21 |
13,412.55 |
|
1993/01/01-1993/12/31 |
3,836.70 |
2,664.68 |
3,605.71 |
10,107.09 |
|
1994/01/01-1994/12/31 |
3,141.60 |
1,800.91 |
2,464.12 |
7,406.63 |
|
1995/01/01-1995/12/31 |
3,235.40 |
1,406.03 |
2,039.92 |
6,681.35 |
|
1996/01/01-1996/12/31 |
2,206.40 |
761.19 |
1,123.72 |
4,091.31 |
|
1997/01/01-1997/12/31 |
2,383.50 |
674.05 |
969.75 |
4,027.30 |
|
1998/01/01-1998/12/31 |
2,680.65 |
567.86 |
829.49 |
4,078.00 |
|
1999/01/01-1999/12/31 |
2,264.99 |
327.52 |
499.85 |
3,092.36 |
|
2000/01/01-2000/12/31 |
2,656.71 |
197.55 |
370.20 |
3,224.46 |
|
2001/01/01-2001/12/31 |
6,300.63 |
173.15 |
432.76 |
6,906.54 |
|
Total all periods |
|
37,458.68 |
16,652.57 |
23,011.47 |
77,122.72 |
|
|
|
|
|
|
|
|
Total amount assessed |
77,122.72 |
|
|
|
|
Please note that interest and penalties accrue daily on the total
balance owing. This assessment is not a substitute for the unfiled return(s)
and does not relieve you of your obligation to file the return(s) and pay
all amounts owing. Please file the overdue return(s) and pay any taxes owing
immediately. Failure to do so may result in legal action being taken without
further notice.
For more information, contact your local tax services office or
call:
Local (604) 669-7994 Toll Free 1-800-663-0474
.
Commissioner of Customs and Revenue
David Ingram of the CEN-TA Group
