Do bookkeepers charge HST?

by Kim
(Scarborough, Ontario.)

I live in Ontario and am wondering do bookkeepers and accountants charge HST on their services? And if they do, do they charge 5% or the full 13%?



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Hi Kim,


I want to say "Yes, bookkeepers and accountants charge HST in BC and Ontario." But I decided to check.

BC's HST charged on accounting services can be found in the report What's Taxable Under the HST and What's Not? at http://www.hstinbc.ca/media/GST_PST_HST_List_v04.pdf .

I was surprised when I visited a similar page for Ontario at http://www.rev.gov.on.ca/en/taxchange/taxable.html . Accounting services were not listed. This doesn't mean they don't attract HST, just that they weren't put on this particular list.

I'm guessing accounting and bookkeeping services do attract HST in Ontario. If you make a quick call to the CRA, they can easily verify that for you.

With regards the correct rate to use:

The service is going to attract GST or HST. They are two different rates.

If you reference my GST/HST rate summary table, you will see that the current GST rate is 5%.

This means that the HST rate cannot possibly be 5% because the HST rate formula is:

federal portion + provincial portion = HST
where federal portion = GST and provincial portion = HST - GST





P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.

Comments for Do bookkeepers charge HST?

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HST ~ yes, in Ontario!
by: Ursula

I am a bookkeeper in Ontario.

I registered with CRA last year.

Bookkeepers are to charge 13% HST on their services.
Thanks
by: Lake

Thanks Ursula for taking the time to confirm that accounting and bookkeeping services attract HST in Ontario.
only after you reach the limit
by: Kyle

Bookkeeping services do not need to add HST in Ontario to their bills UNLESS the total income reaches the HST limit for income (which is $30,000 or so).

If you don't make that much (gross) you don't need to register for HST, thus you are not obligate to collect it from clients.



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An excellent point Kyle.

However, if you voluntarily became an HST registrant even though you earned under $30,000 so you could claim your start up and business expense ITCs, you must collect HST.
BC Returns to PST
by: Lake

Now that BC is no longer charging HST but has moved back to PST + GST, bookkeepers in BC only charge GST.

Services, with some exceptions such as legal services, do not attract PST.

See the Guide to PST in BC series of chats to learn more.
Bookkeeping is subject to HST
by: The Happy Bookkeeper

Hello Kim!
As per CRA's website, bookkeeping services are not on the exempt list:
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/gnrl/txbl/xmptgds-eng.html
Bookkeeping is not to be confused with financial services such as arranging a loan, which is on this list. Bookkeeping is a taxable service and is subject to HST/GST.

A business owner is not required to collect HST/GST on taxable supplies or services if their sales are below $30,000 within four quarters. So, even though Bookkeeping is a taxable service, if your annual sales are below $30k, then you are not required to register for GST/HST, and therefore do not need to collect it. [Editor's note: if you are NOT a GST/HST registrant] If your sales exceed $30,000 within four consecutive quarters (not necessarily the calendar year), then you are required to register for a GST/HST account and collect.
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/rgstrng/menu-eng.html

Though, you are allowed to register and collect HST even as a small supplier (below the $30k threshold). There are benefits to this, such as claiming the HST/GST credits, but be sure to stay on top of the remittances!

I also want to point out that you wondered if you should only charge partial HST. One cannot charge partial HST. One either charges GST (in the GST Provinces) or HST (in the HST provinces) and in Ontario HST currently is 13%. When any other percentage is used in Ontario on bills, note that it does not say "HST". Rather, it classifies it as "RST" or "Retail Sales Tax", and this only goes to the Ministry of Ontario, and therefore cannot be claimed as an HST ITC. I've seen people not catch that, and incorrectly claim the RST charged at MTO, or the RST charged on insurance! These credits will be denied in an HST review.

Lastly, if you do register for HST, be sure to put your HST# on all your bills when you collect this on behalf of CRA, as that is a requirement.

Have a Happy Day!
Naomi aka The Happy Bookkeeper

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