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Ross McDonald, a former real estate partner of mine and now an
owner of Lighthouse Realty in Abbotsford has sent along this
missive which I will leave as is.
I will add one more tidbit and that is that if your spouse has a
GST number or you have a GST number for a corporation you
control, both you and your spouse are considered to be a GST
registrant personally and must charge and remit GST. It would
also apply if you had a GST number for yourself and owned a small
corporation which only did $10,000 a year in GST. The
corporations automatically considered to be registered because
you are.
Next, I am going to send out the text of a letter which can be
found at http://www.centa.com/0696.htm. This was a letter I wrote
in June 1996 to Jean Chretien.
This is all going to Joe Clark's office. Hopefully, he will send
it on to Chretien and his new leader Peter McKay. (Of course,
David Orchard will have to approve it first).
-----Original Message-----
From: Ross McDonald [mailto:[email protected]]
Sent: Thursday, June 05, 2003 7:28 AM
To: [email protected]
Cc: Ross McDonald
Subject: Re: GST (GOODS AND SERVICES TAX)
ASSESSMENT - CANADA ONLY
Hi David,
very good point on the GST. To compound matters, even if you
disagree with some part of the assessment, filing a T400A does
not stop collection activity as we have found out with some of
our realtors and furthermore the GST folk claim that they are
exempt from the 40% garnishee limit and can garnishee up to 100%
if they so wish.
furthermore, if you already have a GST No. for one activity (ie
realtor) and start up a sideline business (eg landscaping) then
even though the landscaping business is under $30,000, by virtue
of the fact that you already have a GST No. - all your activities
are now subject to GST. I have a very interesting letter from the
GST people that I will forward to you on this item.
thanks
Ross
On Wednesday, June 4, 2003, at 11:46 PM,
[email protected] wrote:
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, surveyro, 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 registerd 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, non eof them
remember being told to register at all.
If you are self employed and expect to gross over $30,000 geet
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 IHarmonized 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 GSTIHST 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)
<image.tiff>
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
US / Canada / Mexico tax and working Visa Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 913-9133 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
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