Unfiled HST Returns Catch-Up Calculator
The CRA’s notional assessment ignores every input tax credit you were entitled to. Work out what you actually owe, how much the notional figures overstate it, and the value of credits about to expire at four years.
total arrears today
—
—
—
—
What You Actually Owe
| Item | Basis | Amount |
|---|
The Four-Year Credit Deadline
| Item | Position | Amount |
|---|
Filed Returns Against the CRA’s Estimate
| Item | Notional Assessment | Filed Returns |
|---|
Cost to Get Current
| Item | Basis | Amount |
|---|
Points That Decide This
What to Do Next
—
Disclaimer: Net tax is HST collected on taxable supplies less input tax credits on eligible purchases, and HST is applied here at the Ontario rate of 13%. The failure to file penalty under section 280.1 of the Excise Tax Act is 1% of the amount owing plus 0.25% of that amount for each complete month the return remains outstanding, to a maximum of 12 months. Interest on GST/HST arrears is charged at the basic rate plus 4 percentage points, compounded daily, modelled here at a total of 8%. Most registrants must claim an input tax credit in a return filed within four years after the due date of the return in which the credit could first have been claimed; a two-year limit applies to certain listed financial institutions and to registrants whose taxable supplies exceed $6,000,000 in each of the two preceding fiscal years, subject to exceptions. Input tax credits must be supported by documentation meeting the prescribed information requirements, and credits without adequate support are commonly denied on audit. Where a return is not filed, the Minister may assess the net tax for the period under section 299, commonly called a notional assessment, and such an assessment is generally based on estimates that do not reflect the registrant’s input tax credits. Filing the outstanding returns is the ordinary route to displacing a notional assessment, though a notice of objection may be required where the assessment period has advanced. Amounts collected as HST are held in trust for the Crown and directors may be personally liable under section 323 of the Excise Tax Act. Professional fees are indicative fixed fees including HST, confirmed in writing before any engagement begins. This page is general information, not tax advice.
A Notional Assessment Gives You No Credits
When returns go unfiled, the CRA can assess the net tax itself under section 299. That assessment is an estimate built from whatever they can see, usually deposits or prior filings, and it contains no input tax credits at all.
That is the key point. You were entitled to recover the HST you paid on your own purchases, and a notional assessment simply ignores it. The number on the notice is almost always far larger than the real liability.
| On $180,000 of Quarterly Sales | Amount |
|---|---|
| HST collected | $23,400 |
| Credits on $95,000 of expenses | $12,350 |
| Real net tax | $11,050 |
| What a notional assessment might show | $23,400 or more |
Filing accurate returns is what displaces the estimate. That is the ordinary route, and it is why a notional assessment should be treated as a prompt to file rather than as a final bill. Where the assessment has aged, an objection may be needed alongside the filings.
Credits Expire After Four Years
This is the number that should make anyone act. Most registrants must claim an input tax credit within four years after the due date of the return in which it could first have been claimed.
After that the credit is gone. Not deferred, gone. A registrant four years behind is not just accumulating penalties, they are permanently losing money they were entitled to recover, and every month of delay writes off more.
This is the one cost of waiting that can never be recovered. Penalties can be relieved on application, interest can be reduced, arrangements can be made. An expired input tax credit is simply lost, and no amount of later cooperation brings it back.
A shorter two-year limit applies to certain financial institutions and to large registrants with taxable supplies over six million dollars in each of the two preceding fiscal years. Most owner-managed corporations have four years, but it is worth confirming which applies.
Credits Need Documentation, Not Just Bank Entries
Input tax credits have to be supported by documents containing prescribed information. A bank statement showing a payment is not enough on audit.
What is needed depends on the value of the supply, and larger amounts require more, including the supplier’s registration number. This matters on a catch-up because reconstructing from bank data alone produces credits that look fine on a return and get denied on review.
- The supplier’s name and, above the relevant thresholds, their GST/HST registration number
- The date of the invoice or the supply
- The amount paid or payable
- The tax charged, or a statement that the amount includes it
- Your name as the recipient, above the higher threshold
Requesting duplicate invoices from your main suppliers is usually straightforward and always worth doing. On a catch-up file, a handful of large suppliers often accounts for most of the credit value, and those are the invoices worth chasing first.
The HST You Collected Was Never Yours
Amounts collected as HST are held in trust for the Crown. That is a different character from ordinary tax debt and it changes the CRA’s posture considerably.
Directors can be personally liable under section 323 of the Excise Tax Act, and that liability survives the corporation. A registrant sitting on years of collected HST is in a materially worse position than one who simply owes corporate tax.
The Penalty Is Smaller Than People Fear
The failure to file penalty is one percent of the amount owing plus a quarter of a percent per complete month, capped at twelve months. That is a maximum of four percent of the balance.
Interest is the larger number over time, compounding daily at the basic rate plus four points. But neither is the main event on a long catch-up. Expired credits usually exceed both.
| Cost of Delay | Recoverable? |
|---|---|
| Failure to file penalty | Relief available on application |
| Arrears interest | Partial relief possible |
| Expired input tax credits | Never |
What Order to Do This In
- Pull the CRA account to establish exactly what is outstanding and what has been assessed
- Identify the periods closest to the four-year limit and do those first
- Gather invoices from the largest suppliers, which carry most of the credit value
- Complete the bookkeeping for the affected periods
- File every outstanding return, oldest first where credits are expiring
- Object where necessary if notional assessments have aged
- Apply for relief on penalties and interest with the filings
Where credits are close to expiring, filing beats perfecting. A return filed on supportable figures inside the window preserves the credits. A perfect return filed after the deadline does not.
What This Calculator Does Not Cover
- Whether your supplies are taxable, zero-rated or exempt, which changes everything
- The quick method, which some small registrants elect
- Director liability under section 323, assessed separately
- Objections and appeals where an assessment has aged
- Payment arrangements with collections
- Provinces outside Ontario and multi-province registrants
The four-year clock is the reason to move this week rather than next quarter. Our HST filing service covers the catch-up, the notional assessments and the relief application.
Frequently Asked Questions
Common questions on unfiled HST returns.
Related Calculators and Guides
More tools for registrants behind on HST.
File Before the Credits Expire
Send us the periods outstanding and any assessments you have received. We will quantify the real net tax, file every outstanding return, displace the notional figures and apply for relief on the penalties.