1-800-ASK-HART – Change In GST Reporting Methods From The Quick Method To The Traditional Method

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1-800-ASK HART // A Reader Writes …

I certainly like the way that you express yourself, as the information is easy to read and logical. I have been trying to understand the information provided by the CRA as to when and how a person switches from the Quick Method to the traditional method of accounting for gst; however, the instructions seem so obscure. Can you possibly explain the procedure in a manner that makes sense?

By Judith Farrell on 10.25.06 8:11 am

The GST Rate in Canada changed July 1, 2006 and I previously blogged a little about changes that affect the GST Quick Method …

You can also see Canada Revenue Agency’s information online … RC4058(E) Rev. 06 – The Quick Method For Accounting For GST/HST

Electing to USE the Quick Method .. AND … Revocation of the Election of using the Quick Method

To elect to use the Quick Method, call our Business Enquiries line at 1-800-959-5525, or complete Form GST74, Election and Revocation of an Election to Use the Quick Method of Accounting, and send it to your tax services office (the lastest form is HERE)

Yes – It’s the same form. You can download it online and prepare it … and drop it off to any Canada Revenue Drop Slot, or by mail. For myself, when I prepare elections or file anything (tax returns, consent forms, etc) .. I send the original, and keep a copy naturally, with TWO copies of a covering letter with a self-enclosed and self-addressed envelope. I describe WHAT I am sending to Canada Revenue Agency, and then I ask if they can acknowledge receipt of the contents by DATE STAMPING the duplicate letter enclosed and mailing it back to me in the self-addressed envelope! Note: Not all provinces will pay for postage back, and in Winnipeg CRA pays it. However, if I ~definately~ need to have a stamped receipt I always add postage to the envelope ‘just in case’. I send a lot of stuff every week and especially during the last week of every month and during T4 season and during T1 season .. and keep all the letters stamped in date order of my letters sent. It’s handy in case you ever have to prove anything.

If you have an accountant or tax preparer, you should consider signing the T1013 (personal) or RC59 consent forms and give them permission to enquire about your tax details. Personally, if you are my client – you already know that I print these out every year and update Canada Revenue Agency’s records with the form .. even though technically it is good until you revoke that permission (or 3 years now I believe).

Regardless of you giving your accountant consent .. he/she should be able to offer you good advice anyway!

Usually when it comes to GST matters, you can try any of the following numbers to speak to a representative and discuss your situation more clearly.

1-800-959-5525 >> that’s the Official phone number listed above, but it’s busy quite a lot
1-800-959-2765 >> This is probably the first number I usually try for general GST information
1-800-724-0790 >> I believe this gets routed to the Winnipeg Stapon Tax Center (who does more business related)
FAX 204-984-1812 >> that’s where I fax GST Related information – but, always talk to a representative FIRST and obtain the best Fax Line number that you should fax anything to.

When and how can you revoke the election?

You can revoke your Quick Method election only after it has been in effect for at least one year. You have to revoke the election by the due date of the GST/HST return for the last reporting period in which you wish to use the Quick Method.

Note:

The effective date for revoking your election has to be the first day of a reporting period. (You can’t change in the middle of a GST Reporting Period).

If you revoke the election, you have to wait at least one year before you can elect to use the Quick Method again.

In addition, if you stop using the Quick Method, you cannot claim ITCs for any tax paid or payable on purchases you made while using it, other than the ITCs you would have been entitled to claim, but did not claim, while you were using the Quick Method.

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Hope that all makes sense now.

Comments

Artike says:

Interesting method that is.

Rick says:

Hi, I have a daughter and son-in-law who sell their service from home. Son-in-law uses the quick method and daughter uses traditional method foe GST in Ontario. The son-in-law bills the vast majority of the billings and bills the daughter to split some income. With the two different GST methods the inter family billings do not wash the GST. He cannot claim the input tax credit to his spouse. Question, can the change from quick method be done retroactively? and how far back if so?

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