Tuesday’s= Starting a Business
When you are starting a business – there are two reasons why you want to register to collect goods and services taxes as soon as you can. The first reason is financial and the second one involves marketing.
Financially you want to get all of the refunds of HST that you can. When you are starting a business you are spending money, when you are spending money you are paying HST and when a business that has register to collect HST is paying HST they get it back. New business owners may not understand that it is possible to get refunds of HST from the government. This is a true story – I have seen it happen. So you need to be registered as soon as possible so that you get all of the refunds.
Marketing wise, you need to be registered to collect GST because if you are not registered then your customers know that you do not bill $30,000 a year. They know that you are not very successful. Some clients do not want to deal with people who are not very successful. Some clients will assume that you are working under the table. There is a market for under the table work, but I am not recommending any illegal activity.
There are types of businesses that cannot register for HST. Examples are daycares, most medical businesses and residential rent.
If you are starting a business that is eligible to be HST registered you should do so as soon as possible. You are planning to make a success of this business and you should act like that.