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Hiring someone to do work for your farm or business often starts with trust. You hire a contractor, repair company, consultant or other service provider, they complete the work, hand you an invoice and you pay it.

But there is one small detail on that invoice that business owners should not overlook: if you are being charged GST/HST, is the person or company actually registered to collect it?

The Canada Revenue Agency (CRA) provides a free online GST/HST Registry that allows businesses to confirm whether a supplier charging GST/HST is registered. Taking a few minutes to verify this information can help protect your business and the input tax credits you claim.

This becomes particularly important when you hire contractors or subcontractors. Whether you are paying someone for repairs, construction, trucking, equipment maintenance, professional services or another business expense, don’t automatically assume that because GST/HST appears on the invoice the supplier is entitled to collect it.

According to the CRA, the GST/HST Registry is specifically intended to help businesses ensure that input tax credit claims include GST/HST charged by someone who is registered for GST/HST.

Why does that matter?

Businesses registered for GST/HST can generally recover GST/HST paid or payable on eligible purchases and expenses related to their commercial activities by claiming input tax credits (ITCs). These expenses can include such things as fuel, freight, professional fees, maintenance and repairs, office expenses, rent and utilities.

However, CRA guidance states that where a supplier charges GST/HST and provides a false or incorrect GST/HST registration number, the purchaser may not be entitled to claim the related input tax credit.

That can leave the business owner in an unpleasant position. You may have paid the invoice, including what you believed was HST, recorded the expense in your books and claimed the tax on your GST/HST return—only to discover later that there is a problem with the supplier’s registration.

There is a simple way to reduce that risk.

The CRA’s GST/HST Registry allows you to check the supplier using the first nine digits of the GST/HST account number, the business’s legal, operating or trading name, and the transaction date. For taxable goods or services of $100 or more, CRA says the supplier must include its GST/HST account number on receipts, invoices, contracts or other business papers.

If the number isn’t there, ask for it.

Once you have verified the registration, CRA recommends printing the Search Details screen. Keeping that confirmation with the invoice or electronically with your bookkeeping records provides documentation showing that you checked the supplier’s registration.

There is another important point to remember: not every legitimate small business has to be registered for GST/HST. Certain small suppliers may not be required to register, although eligible businesses can choose to register voluntarily.

The concern isn’t simply that someone doesn’t have a GST/HST number. The concern is when someone charges you GST/HST without a valid registration.

Good bookkeeping isn’t only about entering numbers after the transaction has happened. It is also about making sure the paperwork supporting those numbers is correct.

Before paying a new contractor or supplier who has charged GST/HST, take a few minutes to check the number. Verify the business, save the confirmation and keep it with your records.

It is a small bookkeeping habit that could prevent a much bigger headache if CRA ever reviews your input tax credit claims.