BOOKS AND/OR RECORDS
Books and records are used to refer to the various documents detailing your businesses income and expenses. Usually, you have to keep all sales and purchase invoices and other records for your business operations and GST/HST for six years.
A statement listing the total assets and liabilities, indicating the net worth of the company for the given moment in time.
A statement that summarizes revenues and expenses for a period of time.
As an employer or payer, you hold payroll deductions in trust for the Receiver General. You have to keep these amounts separate from the operating funds of your business. You must deduct Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and income tax return preparation from amounts you pay. You remit these deductions plus your share of CPP contributions and EI premiums throughout the year on your employee’s behalf.
SOLE PROPRIETORSHIP / PARTNERSHIP
A sole proprietorship is a non-incorporated business entirely owned by one person that is run in the hope of obtaining a profit. A partnership is usually the relationship between persons who conduct a business in common in the hope of obtaining a profit.
SOLE PROPRIETOR (SELF-EMPLOYED)
You are a sole proprietor (self-employed individual) if: your business is not incorporated; you have sole responsibility for decision making; you receive all profits and are responsible for all losses; and you report your business income on a T1 Individual income tax return.
A corporation is a separate legal entity. It can enter into contracts and own property in its own name, separately and distinctly from its owners. It has to pay income tax return on its income, and therefore must file its own income tax return.
WHAT IS GST/HST AND PST?
Goods and services Tax (GST) is a sales tax return that applies to the supply of almost all goods and services in Canada. GST may be combined with a province’s provincial sales tax to create the harmonized sales tax return (HST). In some provinces and territories, the provincial sales tax return (PST) or retail sales tax is applied separately.
In BC, GST is 5 per cent and PST is 7 per cent. Registering for GST is mandatory for all small businesses with gross annual revenue greater than $30,000, unless your product or service is exempt.
Businesses are required to register to collect PST if you regularly do any of the following:
- Sell taxable goods, taxable software or telecommunication services to customers in BC
- Accept purchase orders for taxable goods, taxable software or telecommunication services from customers located in BC
- Deliver taxable goods to a location in BC
- Solicit persons in BC (through advertising or other means) for orders to purchase taxable goods, taxable software or telecommunications services
GST/HST FILING DUE DATES
If your reporting period is monthly or quarterly, you have to file your GST/HST return and remit any amount owing no later than one month after the end of your reporting period.
If your reporting period is annual, you usually have to file your return and remit any amount owing no later than three months after the end of the fiscal year. If you have to pay quarterly installments, they are due no later than one month after the last day of each fiscal quarter.
If you are an individual with business income for income tax purposes who is also an annual filer with a December 31 fiscal year-end, you have to file your return by June 15. However, any GST/HST remittance is due on April 30 and must be remitted by that date to avoid penalties and interest.