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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 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 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)
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
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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