Working with a new taxpayer—sole proprietorship (HST-registered). They have a bookkeeper who handles the bookkeeping and HST return. I’m preparing the income tax return.
When I downloaded slips (AFR), I came across a T4A with a Box 048 amount exceeding $10,000. However, after checking the QB file ($100k revenue and many clients), I couldn’t seem to find any corresponding sales from the T4A payer (will double check with bookkeeper).
I will include this amount in income and inform the bookkeeper to record it as well if not done already.
My question is: Does GST/HST apply here?
According to CRA guide RC4157, Deducting Income Tax on Pension and Other Income, and Filing the T4A Slip and Summary:
Box 048—Fees for Services—includes amounts paid for services but does not include GST/HST paid to the recipient for these services.
Should the bookkeeper be recording GST/HST on this amount on their end?
Hopefully the bookkeeper is aware of this income and it is just recorded as a different name for bookkeeping purposes.
If not, I presume the owner will need to track down the source of this T4A . I highly doubt someone making 100K would not have any idea where $10K is.. that is about 10% of the revenue.
A T4A is generated as invoices were paid by that issuer.. one would assume that HST was charged already.
I think you are maybe thinking too far ahead here.
Step 1.. determine whom issued the T4A and for what invoices, only then can you move on to other questions
Instructions for the T5018 slip:
Box 22 – Construction subcontractor payments – The total
amount of payments made by the payer to the recipient in the
reporting period. This total may include goods and services tax/
harmonized sales tax and provincial or territorial sales tax, if
applicable.