CRA program accounts: does my business need them?
My business has a business number. Isn't that enough? Business numbers can be thought of as the Social Insurance Number for a business. It is nine digits and it is used as your business identification with the CRA and other government departments. But unlike your SIN, many businesses can't stop with just their business number. Many will need to add accounts to their business number. Add an account to a number? Now I'm confused.
Think of your business number accounts as in trays at the CRA where they are expecting to receive paperwork and in some cases money from your business. Once these accounts are created, your business will have different filing requirements and schedules that should be followed carefully. What types of accounts can be created?
- Goods and Services Tax/Harmonized Sales Tax
- Corporate Income Tax
- Information Return
For the purposes of this blog, we will focus on the GST/HST and payroll accounts.
GST/HST: certain companies in Canada are required to register for GST/HST because of their size, the products/services they offer, and other factors. Many businesses will voluntarily opt into the program before they are required, or choose to file more frequently than they are required. More information can be found on the CRA website here.
Payroll: businesses that have employees that are paid by payroll are required to register for a payroll account. The timing of when to register is explained here. If your business only hires contractors that are paid by invoice, a payroll account may not be required.
What does this mean for my business? That in order for your business to charge GST/HST or pay employees by payroll, you need more than a business number. The accounts that you open for GST/HST and payroll will be used to file your claims and remit or make payments toward these accounts. Because you are collecting GST/HST or payroll source deductions on behalf of the CRA, and that money isn't yours to keep.
Subscribe to Clearview's mailing list to receive future blogs on topics of interest to small business owners. Or suggest a topic you'd like to see covered using the Ask Us! button.
This blog is intended for information purposes only, and is not meant to replace the services of a bookkeeper or an accountant.