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| 204, 2910 30th Avenue Vernon, BC V1T 2B7 |
Impact of HST, from a bookkeeper | |
| 250-542-4048 |
This is not about whether or not the HST is good or bad. It is about how you can take advantage of the change. 1. If you are either: a. in business & want to increase profits, or b. part of a Not-For-Profit that claims back part of the GST paid out. Recommendation (if either of 1 above is true): Delay making large purchases of equipment, office supplies - anything with PST - until after July 1st. ~~~~~~~~~~ Rationale, for businesses: Before Jume 30th, the PST embedded in the price is part of the cost of purchasing the item. On a $100 item, with both taxes the cost is $107.00 (100 + PST). The $5 GST is returned to the business as a credit on your GST return. After July 1, the cost of that $100 item is $100. The GST credit on the remittance is $12, not $7. Net Income is goes up $7 on a $100 purchase after July 1st. For large purchases (a $50,000 truck = $3,500 of PST) the difference starts to add up. If you are in business to make a profit, wait until after July 1st. ~~~~~~~~~~ Rationale, for not-for-profits: The math is simpler. Whatever GST you pay out, Canada Revenue Agency sends back a percentage - usually 50%. Which is bigger? (social workers are going to struggle with this one) 50% of 5% (before June 30th), or 50% of 12% (after July 1st)? ~~~~~~~~~~ Does the recommendation above make sense? If you have any questions or concerns please let me know. |
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