Client received a Review for election eligibility letter from CRA.
Letter states they may be eligible for the Quick Method of Accounting.
Client has been using regular method for years.
Sales did dip significantly in 2022 (just over $30k), which maybe why they received the letter.
The way I see it - the only way to decide between the Quick vs Regular method is to run the numbers to see what works best.
Can anyone discuss their experience with this?
I like the Quick method. I mainly use it for consultants who don’t have a lot of taxable supplies. They usually end up benefiting from it but it’s also a real time saver.
QM doesn’t have anything to do with the 30K but I have encouraged many of my clients to switch in cases where they’re eligible & there aren’t a lot of ITC’s available. As Versa said, a huge time saver and very often a $$ saver, too (not sure what our gov’t would gain by encouraging this??!!). Just pay attention to the client’s “window of time” re: date when they can make the election effective!
Some points in guide (RC4058)
“If you file annual GST/HST returns, you have to make the election by the first day of your second fiscal quarter.”
From my understanding, election would have to be made by April 1, 2024 for quick method to apply to 2024 GST/HST return.
“You can claim any ITCs to which you are entitled for the
following only:
â– purchases of real property and improvements to real
property
â– purchases of capital property (other than real property),
such as computers and vehicles, and improvements to
capital property”
The way I’m understanding that is we would claim ITCs on purchases of capital property.
So if remittance amount: $2200
Lessen it by $200 ITC from a computer purchase
= $2000 remitted.
“To qualify for the 1% credit ($300 - $30k x 1%), your quick method election
must be in effect at the beginning of a fiscal year.”