A Six-Tip Cheat Sheet for the PST Transition

Janice Roper, Partner at Deloitte

BCBusiness isn’t suggesting that you cheat on your taxes, but you can save money and stress by preparing your business for the April end of the HST.

BCBusiness sat down with Janice
Roper, partner at Deloitte, and Lisa Zajko, senior manager of Indirect Tax and Customs & Global Trade, and got answers to your questions. Don’t want to make an April fool’s joke of the PST transition? Here are six tips that will help your business make the most of the tax switchback.

Do you even need to register? If yes, start now and do it online.

Does your business purchase goods or make taxable sales? Then yes, you need to register. You can register with the Ministry of Finance by fax or mail or go to a Service BC Centre. Either way Roper and Zajko advise that you get started ASAP and do it online. Only 32,000 out of the 160,000 businesses have registered, don’t be part of the last-minute scramble.

Make big purchases now and get your office supplies invoiced for March

Businesses registered to get input tax credits should purchase goods before April 1 in order to take advantage of tax credits on big-ticket items. “Make sure that your supplies, things like paper and ink, get invoiced by the end of March,” says Roper.

Wait until April 1 to purchase services

“Most services are nontaxable under PST so you could wait until April to purchase those services and that will improve your cash flow slightly,” says Roper.

Get your lawyer to invoice before March 31

Legal fees are the only taxed professional services. From April onward, lawyers will charge a non-refundable seven per cent on top of billings. Roper suggests getting your invoices in for February and March before the 31st to avoid this.

Pay expense claims and allowances before March 28

Does your business have a programmed system for claiming input tax credits off of employee expenses? If it does, get those invoices in by the last business day in March (Take note: there’s an Easter long weekend coming up). Starting April 1, you can only claim five per cent off of expenses from the prior months.

Know your exemptions

Former PST exemptions will be re-implemented, but changes in the wording could seriously affect your business. The change from “fit for human consumption” to “for human consumption” could add an extra seven per cent to how much you pay for cattle feed or pet food. Stay tuned to the provincial government’s daily bulletins and notices for information on industry specific tax applications.

We also sat down with Janice and Lisa to answer your questions and comments

@bcbusiness @deloittecanada Will I use my HST number as my new GST number? Does the change happen April 1? #DeloitteBCPST

— Sophia Cheng (@chengsophia) February 27, 2013

Your number will stay the same. Your old HST number will become your new GST number.

@bcbusiness @deloittecanada as we are a restaurant we should have it be very beneficial being rid of the HST

— Doreen McMillan (@LdyNorthernRose) February 27, 2013

Yes, but remember that you’re going to start paying PST on your inputs, so if you’re in need of new tables, chairs, glasses, or say, a new POS system, buy those in March.