How To Cancel GST/HST Account

by Brian
(Ottawa, Canada)

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Editor's Note March 2024: I updated the information presented in this post on how to cancel your GST/HST account over at my sister website Bookkeeping-Essentials.ca.

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I volunteered to register for GST number. I have a lawn cutting business and will make well under the mandatory 30K.

I have not had any business yet and as a result haven't collected any GST - my income will be well under 30 K.

How do I cancel my GST number that I volunteered for?

Thanks, Brian



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How To Cancel Your GST/HST Account


Hi Brian,

To close out your GST account, you must fill out CRA's form RC145 Request to Close Business Number (BN) Accounts.

The form can be mailed or faxed to your tax services office.



There are a few things you need to be aware of before you cancel your GST/HST account as there will be a financial impact.

  1. When you are a small supplier, you must have your GST/HST account open for at least twelve months before you can close/cancel your registration.

  2. When you cancel your registration, any non-capital property held in supply is deemed to be sold/disposed of at fair market value (FMV). You will be responsible for collecting GST/HST on these items ... and reporting/remitting it to CRA on your last return.

  3. Any capital property the business owns is considered / deemed sold under change of use rules. You must self assess and pay GST/HST at that time because you have changed the primary use from commercial to non-commercial.

    For example ... you bought a lawn mower that cost $400. The GST paid at time of purchase was
    $20. The $20 input tax credit is claimed on your GST/HST return. Now the mower is a year old with a FMV estimated at $320. You will have to pay GST/HST using CRA's formula upon de-registering of ($20 - $0) x ($320 / $400) = $16.

  4. If you have any prepaid arrangements, you must adjust your final return for any input tax credits provided after you close your account.



Brian, I am uncertain as to whether CRA lets you opt out of registration if you intend to continue operating your business. You will have to call them to find out.

I am also puzzled as to why you would want to. GST/HST is a neutral tax to business. It is an effective way to reduce your total taxes paid.

It goes without saying that if you haven't had any business yet, your income will be under $30,000. Many small businesses operate at a loss the first few years, so being able to claim your input tax credits helps you reduce taxes and manage your cash flow.



Where To Go For More Information


You can find out more information on how to close your GST/HST account on the CRA website*.






*I like to give my readers the CRA path so they can learn how to find information on the website ... and because every time the site gets reorganized, I have trouble ... sometimes ... finding my reference source again.

Comments for How To Cancel GST/HST Account

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Sep 19, 2012
 De-Registering for GST
by: A Shy Canadian Visitor

I registered for GST when my sales were in excess of $30,000 some 3 years ago.

In 2009 and 2010 my sales did not exceed $30,000 and I would like to de-register. How do I do this and when does it take affect?



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Check out the previous posting above by a business owner who had a similar question, How To Cancel Your GST/HST Account.

As you have been a GST/HST registrant for more than one year, you should have no problem deregistering. Where it hurts your pocket book is paying the GST/HST you have to self-assess on deregistering assets and inventories.

So before you send in Form RC145 Request to Close a Business, make sure you read up on "What happens to your previously claimed ITCs when closing a GST/HST account?" that I chat about in the posting referred to above.






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.
Feb 23, 2013
 I would like to be a small supplier
by: Anonymous

Hello,

My husband and I manufacture 4 organic cleaners and registered for GST years ago.

As you know, running a business is a full time job and then some. I find collecting, recording and remitting GST so time conuming and the government does not pay me for my time.

Our business averages under $60,000 every year.

I would like to know if we could split the company in 2, so the manufacture & wholesale side does under $30,000 and then the retail side would do under $30,000. This way both would become a small supplier. Wonder if we could do this?

Thanks for any input.
Jan 06, 2014
 HST
by: Anonymous

Hi,
I am HST registered for a commercial property purchased about 15 years ago. We registered in order not to pay the GST on the property when we purchased. Since our rental income is less than $30,000 per year can we now de-register. What would be the implications if any?
Sep 09, 2014
 Help
by: Anonymous

My boy friend is painting. He applied for a GST number and I want him to cancel it. (Owing money at the end of the year is hurting us because he doesn't put the GST away.)

He makes over $30 thousand. Is he allowed to cancel it? Once cancelled, he plans to work under someone and not for himself anymore. What are the penalties and what does he need to do.
Sep 10, 2014
 Painter's Woes
by: Lake

I'm sorry to tell you that as long as he self-employed and has sales over $30,000, he must be registered for GST. It is required.

It sounds like he is an annual filer. I recommend he switch to quarterly filing (must get CRA's permission to switch your filing period). This way he has to account for his GST every three months and is less likely to run into trouble.

The best practice is to have a savings account where he deposits / transfers the GST collected after every sale. Once he files his return he can remove the ITC's from the savings account for his own personal use.

See my tip on funds collected in trust.

As long as he is an employee when he begins to work for someone else, as opposed to a sub-contractor, he should be able to shut down his business and close his GST account once it is paid in full.
Dec 28, 2014
 more than one hst #
by: Anonymous

If a person has more than one business, do you need more than one HST #?
Dec 30, 2014
 More Than One HST#
by: Lake

It depends on your business structures.

I believe CRA issues "sub accounts" within your main business account if you are operating different sole proprietorships or more than one DBA within a corporation. For example GST 123456789RT0001; GST 123456789RT0002, etc.

Remember to claim your ITCs, the receipts have to match your legal business name.

See this post here on why you may or may not want more than one HST#.
Jan 07, 2015
 Closed business box 101
by: Andrew

When you are declaring the GST on all the assets you have, but you technically haven't really sold them to anyone, do you put this number in box 101 as "sales and other revenue"; or do you only put the GST from it into box 105 (Total GST/HST and adjustments for period)?

Must you enter it in box 101 as though you had sold it and had a revenue, as though you are selling it to yourself or something?
Jan 07, 2015
 Andrew
by: Lake

The CRA website discusses how to report change in use from commercial to non-commercial here:

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

The GST/HST self assessed on the property you "sell" back to yourself at FMV (keep proof that the value was FMV) is reported on line 103.

There is no mention of line 101. However, it is a sale ... a sale to yourself ... so I would include the amount on line 101. RC4022 states:

"Line 101 – Sales and other revenue -Enter the total amount of revenue from supplies of goods and services, including zero-rated supplies and other revenue for the reporting period." [my emphasis]


Caveat - real estate is treated a bit differently.
Jul 28, 2015
 Accidentally registered for GST number
by: Anonymous

Hi.

I inadvertently registered for a GST number not knowing that in 2015 (after just starting in my fitness training job in June) I would not be making over $30,000.

Can I keep this GST number, do a filing for GST with zero collection of GST and then resume normally collecting GST for 2016 for my clients?

I would then submit my GST form with the GST collected for the 2016 tax year.

Basically, my question is should I cancel this registration and start fresh next year? Thank you so much.
Jul 31, 2015
 Voluntary GST Registration
by: Lake

You need to keep your account open for one year before you can cancel.

As you are a voluntary GST registrant (sales are under $30,000), you have to charge GST on all your sales and report the amount collected on line 105 when you file your report (quarterly or annual) to CRA. However, you also get to reduce the GST paid on your business related purchases (input tax credits) on line 108. This means you only remit the net calculated on line 109 to CRA.

Under NO circumstances can you file a nil return UNLESS it is true .... i.e. that you did in fact have no sales, no sales tax collected, no ITCs.
Jan 26, 2016
 Stopping GST Collection
by: Jadine

My father who is almost 70, has had a small 1-man business for several years, doing building maintenance/janitorial work.

As of this month, his income will drop well below $30,000, due to health issues.

He's been collecting gst, but now wants to stop.

Should the first thing he do is fill out the CRA form 'RC145 Requests to Close Business Accounts'?
Jan 27, 2016
 Jadine
by: Lake

Read the initial post on how to cancel your GST/HST and the issues you need to be aware of BEFORE you do.

From your post, it sounds like what you are saying is your father has a calendar fiscal year (January to December) and he expects to earn less than $30,000 in gross sales in 2016.
Feb 12, 2016
 Deregister GST
by: Jim

I have deregistered from the GST.

How far back must I look to determine how much I owe?

All of my equipment with one exception is very old, plus I do not understand the process to value what I have left.
Feb 17, 2016
 Jim
by: Lake

Your balance lists all your assets in the business. If not, you must know what assets were "attached" to your business and/or in use.

Are you intending on keeping the assets for continued business use as a non-GST registrant? Are you intending to close your business and use the assets for your personal use? Are you intending to sell your business assets to an unrelated third party?

You need to determine the fair market value of your assets. What price would you sell the assets for if you were selling to an unrelated third party? Do you have anything / anywhere you can refer to substantiate that the price is fair market?
Jun 28, 2016
 Concerns
by: Anonymous

Hello, I voluntarily registered for a GST/HST account. I was unaware of the fact that I could operate a business without one. With the understanding that I'm under 30k. I registered my business in January of 2016. I registered for the GST/HST account a couple months later. I've been doing mostly cash jobs up until this point. I've done a couple jobs that required me to invoice clients and charge tax. I've stored that money in a separate account.

My concerns are: 1) I want to cancel my GST/HST account because I will be well under the 30k mark. Will I have to pay GST/HST out of my own pocket on the jobs I've done cash/cheque. I understand I have to be registered for 1 year before I cancel. But, what happens if I'm not registered for 1 year and I stop charging tax?
Jul 12, 2016
 Volunteer GST Registration
by: Lake

Sorry but it is my understanding that you have to ride it out for the year and then you can cancel.

Yes all your sales, regardless of how they were paid, attract the GST and you will have to remit on that. Once you are registered, you must charge GST/HST ... it is not optional

I explain how to record your cash sales here ...

https://www.bookkeeping-essentials.com/good-bookkeeping.html#cashundertable

Remember, as you are a GST/HST registrant, you can claim your input tax credits to offset the GST collected.

.
Aug 29, 2016
 Retiring
by: Milica

I retiree 1 june 2016 from my small cleaning business with my daughter. I don't needed my GST # for my self anymore. How can I cancel. My daughter is running the business alone .Thank you.
Aug 30, 2016
 Milica
by: Lake

Phone CRA and they will walk you through what you need to do.
Jan 25, 2017
 GST/HST owing on noncapital property held at the time of closing
by: Anonymous

I am a sole proprietor who registered voluntarily GST/HST. My business activity is selling the products on the website (E-commercing). So far, I haven’t made any sales ($0 sales) since the business was established in June 2016. I haven’t claimed any ITC from my expenses/purchases because the first return is due by June 15, 2017.

If I am closing the business in Jan 2017, do I need to determine the GST/HST owing on the remaining inventory and remit GST/HST to CRA?

If I says that I am qualified as a small supplier because I do not exceed the $30,000 threshold amount in four consecutive calendar quarters, Would it be reasonable not to remit GST/HST on the remaining inventory to CRA?


Jan 25, 2017
 GST owing on non-capital property
by: Lake

Hey, just go back to the original response to the this post and follow the steps laid out.

Also, if you are closing out your business in January 2017, you can file your 2016 GST report with CRA BEFORE it is due. I would probably do it before you close your business.
Jan 26, 2017
 GST owing on non-capital property (con't)
by: Anonymous

Hi Lake

Thank you for your advice.

I forget to tell you that the remaining stocks are the samples goods which were brought by myself when I flew back to Canada. Hence, there were no input tax claimed on those stocks.

In this case, do I still need to determine GST/HST owing on those stocks when I am closing the business?

Could you pls. clarify my concern?

Thank you :)
Mar 20, 2017
 GST Catastrophe
by: Anonymous

I was a sole proprietor for most of 2016 (until Oct 31, 2016). After, I decided to cease business for myself and start a corporation.

Without realizing, I hit the $30,000 mark in August 2016 but never applied for GST. I continued to make up to $42000 in sales in October before I ended my sole proprietorship and moved on to managing the corporation.

The corporation being a completely different entity has been set up for GST as of February 1st 2017 as I know it will make over $30,000 in 2017.

Because I ended company business within 3 months after hitting the $30,000 mark, am I going to be ok just filing for my regular income tax? Or am I required to go back, calculate and pay the GST from January to October as well? What do you suggest I do?



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Check out my chat on mandatory registration when you meet or exceed the threshold here ...

https://www.bookkeeping-essentials.com/GST-registration.html#threshold
Jul 07, 2017
 Stopped charging HST before deregistering
by: Anonymous

I was charging GST/HST up until a 4 years ago. I've been working full time for several years and my freelance income dropped from roughly $50,000. to less $5,000. Since my income was considerably less than $30,000. I stopped charging GST. I thought I had filled out the forms to cancel my HST account but it appears I'm still registered. Do I have to pay for 4 years of tax that I never collected from clients?
Aug 06, 2017
 Thought I Cancelled my GST Account
by: Lake

Sorry but yes .... unless you can find your cancelation paperwork and the confirmation that it was received. You can try speaking with CRA but they are not obligated to forgive the amount owed.

It's one of those life lessons.
Dec 11, 2017
 Help!!!
by: Anonymous

My boyfriend in 2015 became self employed at the request of the company he was working with. He was told by his employer he needed to register for a GST/HST account, as well as get a business number. He did both.

Whenever he got paid he was paid hst on top of his hourly wage. The total amount of hst that was collected was less then $2000.00. In January of 2016 the same company put all employees on the payroll.

Now when he did his taxes he didn't know about the $30,000 threshold. He made way under $30,000 as he was only self employed for about 6 months tops. So when he filed his taxes for 2015 he owes HST.

My question is since he was under the $30,000 threshold does he need to pay the HST to CRA? What can he do in this situation? It was an honest mistake on his end due to lack of knowledge.
Jan 20, 2018
 Remitting GST/HST Collected
by: Lake

Sales tax is collected in trust for the government. The GST/HST collected is never the business owner's fund even though many business use it to top up their cash flow and run their business.

Because he was a GST/HST registrant and he collected sales tax, he must remit the funds to CRA.

Even if he wasn't registered and collected GST/HST in error, he needs to remit those funds to the CRA.

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