Missed GST/HST Registration Back-Tax Calculator
You went past the small supplier threshold and carried on invoicing without tax. Work out the HST you are liable for since that date, what your input tax credits take off it, and whether you can still recover it from your customers or have to absorb it.
total exposure
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How the Exposure Builds
| Item | Basis | Amount |
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On the Consideration or Tax-Included
| Basis | What It Assumes | Tax on Past Sales |
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Where the Threshold Put You
| Test | Your Figures | Position |
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Points That Decide This
What to Do Next
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Disclaimer: This page produces an illustrative estimate from the figures you enter and is not a tax calculation, a determination of your registration date, or advice on a particular matter. A person who is not a small supplier is generally required to be registered for GST/HST, and the day registration becomes required depends on how the threshold was exceeded: exceeding it in a single calendar quarter and exceeding it over four consecutive calendar quarters produce different dates, and the figures entered here are not a substitute for working that date out on your records. A person who was required to be registered is generally liable for tax on taxable supplies made from that date whether or not any tax was charged to the customer, and whether the tax is calculated on the consideration charged or on the basis that the amount charged already included tax depends on the agreement with the customer and on the facts; both are shown here because the difference is material and is frequently disputed. Input tax credits may be available on eligible purchases, subject to the documentary requirements, to time limits, and to the rules on property and services held at the time of registration, none of which are applied here. Penalties and interest depend on the circumstances, including the periods involved and whether returns were filed, and the penalty figures on this page are editable because their components and the periods they run for must be confirmed; prescribed interest rates change and compound. Tax that was charged to customers and not remitted is held on the Crown’s behalf and is treated differently from tax that was never charged, including for the purposes of director liability. Relief from penalties and interest, and the voluntary disclosure process, have their own criteria, their own time limits, and are generally unavailable once the Canada Revenue Agency has already begun to enquire, so the position changes materially once you have been contacted. Whether an amount can be recovered from a customer after the fact is a matter of your contract with them and of commercial reality rather than of tax law. This page is general information, not tax or legal advice, and a missed registration should be reviewed by a professional before anything is filed.
You Owe the Tax Whether or Not You Charged It
This is the part that catches people. Once you were required to be registered, your sales became taxable supplies. The obligation to account for the tax is yours, and it does not depend on whether you remembered to add it to the invoice.
So the money does not come out of a customer’s pocket. It comes out of your margin, on sales you have already made and already spent the proceeds of.
Which is why this is worse than it looks on the invoice. On two hundred thousand of unregistered sales the tax is tens of thousands of dollars that you never collected and now have to find, before any penalty or interest.
The Two Ways of Crossing Have Different Start Dates
This single distinction decides how far back the liability goes, and it is the most commonly misunderstood part of the rule.
If your taxable supplies exceeded the threshold in one calendar quarter on their own, you stopped being a small supplier immediately, and the very supply that took you over was already taxable. There is no grace period at all.
If you exceeded it over four consecutive calendar quarters without any single quarter doing so, you stop being a small supplier at the end of the month following that quarter, and registration is required by the time of your next taxable supply. That is where the month of grace people half-remember actually comes from, and it applies to only one of the two routes.
| How you crossed | When the liability starts |
|---|---|
| One quarter over on its own | Immediately, including that supply |
| Four quarters cumulatively | End of the month after that quarter |
| Both happened at different times | The earlier of the two governs |
Whether the Price Already Included the Tax Is Worth Arguing
If you invoiced a thousand dollars with no mention of tax, there are two ways to compute what you owe. The tax can be calculated on the thousand as the consideration, or the thousand can be treated as having included the tax, in which case the tax is the fraction inside it.
The difference is roughly one eighth of the figure, which on a large catch-up is real money. Which applies depends on your agreement with the customer and on the facts, so what your contracts and invoices actually say matters here, and the better-documented position is the one you want to be in before this is assessed.
Your Input Tax Credits Are the Good News
Registration brings credits as well as liability. The tax you paid on expenses from the effective date onward generally comes off what you owe, which on a business with real costs can take a substantial bite out of the figure.
Those credits depend on having the documentation, and there are rules about property and services you already held when registration took effect, so this is a part of the exercise worth doing carefully rather than roughly. A catch-up filed without the credits properly claimed overpays.
Credits are also why the net figure is often much smaller than the gross. People see the tax on their sales, panic, and delay, which makes it worse. Working out the credits first usually makes the problem smaller and more manageable than feared.
Business Customers Change the Picture Entirely
If you sold to registered businesses, you can often go back and invoice them the tax now. They will generally pay it, because they claim it as a credit themselves, so it costs them nothing but administration. That turns the whole exposure into a paperwork exercise.
If you sold to consumers, there is no realistic prospect of collecting it after the fact. The money is yours to find. Which of these you are in matters more to the outcome than the size of the liability.
Charging the tax and not remitting it is a different and more serious matter. Tax collected from customers is held on the Crown’s behalf rather than owed by you, which affects both how it is treated and the personal exposure of directors.
Coming Forward Is Worth More Than Waiting
Relief from penalties and interest, and the voluntary disclosure process, generally require that you got there first. Once the CRA has begun to enquire into the matter, the options narrow sharply and the best of them close.
So the value of acting is highest now and falls every month. That is true even though the arithmetic feels like a reason to put it off.
Every Month of Delay Has a Price
Each further month of unregistered sales adds tax on those sales to the pile, adds interest on everything already owing, and in the ordinary case extends the penalty. The figure below prices that so the cost of waiting is visible rather than abstract.
The related calculators cover the neighbouring questions. Our effective registration date calculator works out the date itself in detail, the late filing penalty calculator covers returns that are overdue, and the voluntary disclosure calculator covers coming forward.
What This Calculator Does Not Do
- Determine your effective date, which turns on your own records
- Decide the consideration question, which turns on your contracts
- Test your credits against the documentary rules or time limits
- Apply the rules on property held at the time of registration
- Confirm the penalty position or any relief available
- Assess director liability on tax that was collected
Frequently Asked Questions
Common questions on a missed registration.
Related Calculators and Guides
More on registration and catching up.
Fix a Missed Registration Before It Finds You
Send us your sales by quarter and your expense records. We will establish the date registration was actually required, claim every credit the catch-up allows, and put the disclosure in before the CRA asks rather than after.