The Quick Method of accounting
Quick Method should be use by the businesses who don’t have a lot of ITC credit like real estate business, truck driver, IT professional, etc by Accountant Brampton. The Quick Method is a simplified accounting option available to help small businesses calculate their net tax for GST/HST purposes. This method reduces paperwork and makes it easier to calculate GST/HST remittances and file GST/HST returns because it eliminates the need to report the actual GST/HST paid or payable on most purchases.
When you use the Quick Method, you still charge the HST at the rate of 13% HST on taxable supplies of goods and services. However, to calculate the amount of GST/HST to remit, you multiply the amount
of your GST/HST included supplies for the reporting period by the Quick Method remittance rate, or rates, that apply in your situation.
The remittance rates of the Quick Method are less than the 13% rate of tax that you charge. This means that you remit only a part of the tax that you collect, or that is collectible. Since you cannot claim input tax credits (ITCs) on most of your purchases when you use this method, the part of the tax that you keep accounts for the approximate value of the ITCs you would otherwise have claimed. On average you would pay about
8% HST of total sales including HST. For information on the different
remittance rates, see What are my Quick Method remittance rates?.
Whether the Quick Method will be more beneficial for you to use than the regular method depends on your specific situation. You need register for Quick Method of Accounting with CRA before it can be use (See your accountant for more information).
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