While most people fail to realize it’s significance, the Quick Method of Accounting in Toronto for GST/HST can have a lasting effect on the bottom line of small businesses. GST/HST registrants who opt for the Quick Method collect their GST/HST as per usual, but in turn, they remit an amount that is less than their usual remittance. In exchange for this benefit, the registrant has to forgo claiming their input tax credits or ITC. This means that the Quick Method can, in turn, be a source of income for small businesses that incur a relatively small amount of taxable expenses as there will be few ITCs to let go off. Based primarily on the Quick Method of Accounting in Toronto for GST and HST regarding a service business situated in Ontario whose revenue is minimum 90% from sources inside Ontario, the remittance will be calculated with the rate of 8.8% of tax-inclusive sales.
The Quick Method of Accounting in Toronto is beneficial for small businesses based in Canada.
Moreover, every year, GST and HST registrants who are employing the Quick Method are entitled to a bonus of 1% reduction in the remittance rate that applies to the initial $30,000 of tax-inclusive revenue for the ongoing year.
However, the Quick Method of Accounting in Toronto does have its limitations. For instance, bookkeepers, lawyers, and accountants in Toronto are not permitted to use this method. Also, since the Quick Method of Accounting in Toronto is focused on small businesses. This means that if a business has GST/HST included sales that exceed the amount of $400,000, the Quick Method of Accounting is not allowed.