GST/HST filing – what happens if you don’t file?

You may be wondering: “What happens if I don’t file my GST or HST return on the deadline?”

Here’s a hint: The taxman cometh.

Don’t think for a minute you can get away with not filing your GST/HST return. There are major penalties and processes in place for those who fail to or are late filing. Failure will result in a 1% penalty of the amount owing, as well as 25% of that 1% multiplied by the number of months the return is overdue. Yikes! If you haven’t filed, you’ll receive a Demand to File, along with a $250 penalty if you don’t follow through with a return. Interest will also be charged on overdue amounts, equal to the base rate of 4%.

HST accounts (applicable in BC and most eastern provinces) are considered trust funds collected by taxpayers on behalf of Canada Revenue Agency. If you fail to turn in the HST that you’ve collected, directors of companies can be legally responsible for any unremitted HST. In other words, if the company doesn’t have enough money to pay for the HST, it could come from the directors’ personal accounts or retirement savings.

If you’re audited, you’ll receive a statement of earnings of audit adjustments. You will then have 30 days to analyze and discuss the adjustments with an auditor. After 30 days, a Notice of Reassessment will be sent out explaining the results of any assessment of your GST/HST return along with any changes made. If it turns out you owe, you’ll be sent a GST/HST Amount Owing Remittance Voucher (form RC 159.) Don’t worry – CRA always makes it easy for you to pay up.

Now that we’ve put the fear in you, check out CRA’s website for information on how to file your GST/HST return. Bonne chance!



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