HST - follow up to EMG

Thank you to everybody who responded to my post on EMG offering to respond to GST inquiries.   There were several responses and I have responded to them below:

So far it seems like my board will be going up, but will my farrier and other misc. horse item prices increase as well?

If you are paying either GST or PST on goods or services now, you can expect to be paying HST as of July 1.    

I'm also paying off a vet bill, and because I can't pay it all at the moment, I have to do it over time, so there's a little bit of interest. Will my bill price be affected?

It shouldn't be, the HST is not retroactive. 

Requirement to register:

You have to register once you are no longer a "small supplier" according to CRA.  You are no longer a small supplier once your sales before GST/HST of boarding, training, riding lessons, horses etc.exceed $30k from all your businesses either in a single quarter or in four consecutive calendar quarters.  Note that this is not the same as a calendar year.  So if your sales for 2009 are $10k, all in December, and your sales in the first two months of 2010 are more than $20k, you must register for the GST/HST.  Also, the term "small supplier" refers to all your businesses, so a business cannot subdivide itself into smaller units, each operating under the 30k threshold in order to avoid registering for the GST/HST.


Here is a link to the Canada Revenue Agency Website covering who is required to register: Mandatory Registration

My sales are under 30K - should I register?

Generally businesses with sales under the 30k threshhold will be better off registering for the GST/HST as it will then be possible to recover the GST/HST on their expenses.  It is possible to register on a voluntary basis.  Here is a link to CRA's webpage dealing with voluntary registration:  CRA - Voluntary Registration.  If you are currently absorbing some or all of the tax, don't forget that you will now be paying 13% on all of your inputs, whereas previously services were GST only.  Either you register, or put through a price increase to cover the expense increase.  In both cases, the customer will be paying more, but in many areas of the horse business, most notably boarding, profit margins are already slim and the damage caused by absorbing additional expense may well be ruinous. 

What will happen to the PST exemption on farm supplies?

This will disappear as the PST & GST are replaced by  HST.   Those who register for the GST/HST will be able to recoup any HST they pay on inputs such as feed and other supplies, but must charge GST/HST on sales including boarding fees.  If you have any capital expenditure planned such as a new tractor or a even set of jumps, this can be substantial.

If you were absorbing the GST and paid little or no PST, it might be possible for you to put through a price increase to your customers that is less than 13%  and include the GST in the price.  Your gross after sales tax will be less than before, so you are now looking to the recouped sales tax to make up the difference.  The trick here is to estimate the additional outlay you are going to experience.




The information provided is intended to be general in nature.  It is suggested that readers seek the advice of a CGA or other qualified professional for advice specific to their particular situation.