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Register own small business

Register own small business

Old Feb 8th 2020, 9:16 pm
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Default Register own small business

So... I have two side hustles that require me to register a business.

#1 is sort of an IT Consultancy business but on a small scale
#2 is driving for uber which has me as an independent contractor.

In theory, both require me to collect HST and remit to CRA. I'd prefer to do this on an annual basis and stick the money into a high interest savings account to have it make a few bucks before I pay it to greedy CRA.

Collecting HST does have advantages as it means I can CLAIM HST off of any business expense used for the purpose of my business. (anything IT related for the IT side and anything vehicle related for the Uber side.)

#1 I have had people pay me into my personal account up until now, but it is growing and i'd like to make it a legitimate business.

Questions:

1. Do I need to register 2 separate businesses? One for the tech stuff and one for Uber because they are providing 2 separate services? Or can I register it all under one "Gozit Consultancy Company" and register a secondary business name for the name I want to market my IT business under?
2. Do I need to do anything other then register my business name(s) via the joint federal-provincial program located here: https://www.ontario.ca/page/register...-business-name
3. Do I have to have my business income paid into a business bank account, and use a business VISA or MasterCard for business purchases or can I use a personal chequing account and credit card, as long as I keep track of my receipts/expenses? I have good credit, but not amazing credit and no guaranteed personal income until a few months from now, and don't really want to pay monthly/annual fees on yet another bank account / CC if I dont have to.

I think thats it. I have access to an accountant to help prepare everything come tax time next year but would prefer to do as much of the initial setting up on my own.

Cheers guys.
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Old Feb 8th 2020, 9:39 pm
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Default Re: Register own small business

We run 3 businesses. I am the sole proprietor of 2 of them and my husband the third. The first 2, my real estate and a solar panel business (not selling them just the electricity that they generate via Microfit) are both registered under the same business number and the HST is remitted in one payment annually for both businesses together. This is an option because they are both in my name and that is also the effective name of the business and I do not have a registered business name for either.
The third one, the farm, is in my husbands name and it is registered as a Farm Business. The HST and payroll accounts for that one are separate from the other two.
We do not have business bank accounts, we run everything through our personal banking. I have no idea if that is how we should do it but we have never had an issue. I keep all receipts, mileage log etc. All farm and solar income and expenses from all 3 businesses are put into a spreadsheet with entries cross referenced to receipts. Tax time is a nightmare.
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Old Feb 8th 2020, 11:21 pm
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Default Re: Register own small business

I'm dubious about that HST arrangement. Even in the years when my standing instructions to the accountant were "fines ok, keep me out of jail", he had me pay the HST quarterly (and the CPP/EHT/whatever, the nominally payroll deducted taxes, on time).

So far as IT consultancy is concerned, I don't think it can ever make sense to deduct HST paid, the simple method calculation will be equal or better and requires no record keeping.
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Old Feb 8th 2020, 11:25 pm
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Default Re: Register own small business

Originally Posted by dbd33 View Post
I'm dubious about that HST arrangement. Even in the years when my standing instructions to the accountant were "fines ok, keep me out of jail", he had me pay the HST quarterly (and the CPP/EHT/whatever, the nominally payroll deducted taxes, on time).

So far as IT consultancy is concerned, I don't think it can ever make sense to deduct HST paid, the simple method calculation will be equal or better and requires no record keeping.

It depends how you set it up. I am set up for annual HST. The payroll on the farm.is quarterly, CPP and EI for any employees (ie our kids) but HST is still an annual thing.
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Old Feb 8th 2020, 11:50 pm
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Default Re: Register own small business

Originally Posted by HGerchikov View Post
It depends how you set it up. I am set up for annual HST. The payroll on the farm.is quarterly, CPP and EI for any employees (ie our kids) but HST is still an annual thing.
I know I invited the CRA to take my HST annually but they declined, preferring quarterly. No doubt there are selection criteria.
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Old Feb 9th 2020, 1:00 am
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Default Re: Register own small business

Originally Posted by dbd33 View Post
I know I invited the CRA to take my HST annually but they declined, preferring quarterly. No doubt there are selection criteria.
maybe dependent on earnings?
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Old Feb 9th 2020, 1:04 am
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Default Re: Register own small business

Originally Posted by HGerchikov View Post
maybe dependent on earnings?
or personal history with the CRA.
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Old Feb 9th 2020, 2:54 am
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Default Re: Register own small business

Originally Posted by HGerchikov View Post
We run 3 businesses. I am the sole proprietor of 2 of them and my husband the third. The first 2, my real estate and a solar panel business (not selling them just the electricity that they generate via Microfit) are both registered under the same business number and the HST is remitted in one payment annually for both businesses together. This is an option because they are both in my name and that is also the effective name of the business and I do not have a registered business name for either.
The third one, the farm, is in my husbands name and it is registered as a Farm Business. The HST and payroll accounts for that one are separate from the other two.
We do not have business bank accounts, we run everything through our personal banking. I have no idea if that is how we should do it but we have never had an issue. I keep all receipts, mileage log etc. All farm and solar income and expenses from all 3 businesses are put into a spreadsheet with entries cross referenced to receipts. Tax time is a nightmare.
So essentially the first 2 businesses are the same business, they aren't 2 separate businesses from what I understand of that since they have the same business number? Is that correct?

I'm planning to use an app to track expenses, and then reconcile with total income at the end of the year.

Could I in theory register a business under my own name (or "Gozit Lastname Consulting") as an umbrella to use for reporting both business activities, and register an alternate business name for marketing purposes?

Originally Posted by dbd33 View Post
I'm dubious about that HST arrangement. Even in the years when my standing instructions to the accountant were "fines ok, keep me out of jail", he had me pay the HST quarterly (and the CPP/EHT/whatever, the nominally payroll deducted taxes, on time).

So far as IT consultancy is concerned, I don't think it can ever make sense to deduct HST paid, the simple method calculation will be equal or better and requires no record keeping.
Probably just me being obtuse but can you explain "simple method" calculation?

It might make sense for me to deduct HST from Uber related purchases but not IT related.
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Old Feb 9th 2020, 2:55 am
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Default Re: Register own small business

Originally Posted by dbd33 View Post
I know I invited the CRA to take my HST annually but they declined, preferring quarterly. No doubt there are selection criteria.
According to Uber i'm able to choose whether to remit HST annually or quarterly.

If I have to do it quarterly I don't really care, but if I can do it yearly why not keep the money aside and use it to earn interest, even if only a few $$
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Old Feb 9th 2020, 3:01 am
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Default Re: Register own small business

Originally Posted by Gozit View Post

Could I in theory register a business under my own name (or "Gozit Lastname Consulting") as an umbrella to use for reporting both business activities, and register an alternate business name for marketing purposes?
According to this https://www.ontariobusinesscentral.c...cond-business/ the answer is no.

So, it looks like I have 2 options.

1) Register a single business under my legal name and run Uber income and IT consulting income through it (just invoice as my own name) similar to HGerchikov running 2 businesses as one since they are under her legal name
2) Register a business under my own name for Uber purposes as that is what they require, and register a separate business for my IT consulting stuff using the business name that I would like to operate that under.
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Old Feb 9th 2020, 3:44 am
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Default Re: Register own small business

Originally Posted by Gozit View Post
Probably just me being obtuse but can you explain "simple method" calculation?
When you register for HST you have the choice, once only, to go with the full HST mechanism or the simple method. The full mechanism is, in short, collect HST, subtract HST paid for supplies, remit difference, keep exact records in case of audit. The simple method is collect HST, remit fixed percentage, claim nothing, document nothing. In Ontario the simple method numbers are 13% and 8.8% of gross so bill 58669.6 including tax, remit 5162.92 (to pick an example at random). The full calculation makes sense if you manufacture something, gearboxes for example. you have to buy in shafts and cogs and whatnot. It doesn't make sense for computer consulting as all the expenses are bullshit and won't survive an audit.

The fact that you don't know this suggests it's worth paying a professional to set things up. Your business is stuck with the decisions made now for evah.
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Old Feb 9th 2020, 8:53 pm
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Default Re: Register own small business

Originally Posted by dbd33 View Post
When you register for HST you have the choice, once only, to go with the full HST mechanism or the simple method. The full mechanism is, in short, collect HST, subtract HST paid for supplies, remit difference, keep exact records in case of audit. The simple method is collect HST, remit fixed percentage, claim nothing, document nothing. In Ontario the simple method numbers are 13% and 8.8% of gross so bill 58669.6 including tax, remit 5162.92 (to pick an example at random). The full calculation makes sense if you manufacture something, gearboxes for example. you have to buy in shafts and cogs and whatnot. It doesn't make sense for computer consulting as all the expenses are bullshit and won't survive an audit.

The fact that you don't know this suggests it's worth paying a professional to set things up. Your business is stuck with the decisions made now for evah.
Nope, your explanation makes sense to me. I'll have a professional to prepare things at tax time but I don't need to spend money for someone to do something I can setup online.

I think I will do exactly what HGerchikov did with 2 of her businesses - register one business number/HST thing in my own name and run all activities through that, and do the simple calculation for HST for ease.

Cheers
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Old Feb 9th 2020, 10:06 pm
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Default Re: Register own small business

Originally Posted by Gozit View Post
Nope, your explanation makes sense to me. I'll have a professional to prepare things at tax time but I don't need to spend money for someone to do something I can setup online.

I think I will do exactly what HGerchikov did with 2 of her businesses - register one business number/HST thing in my own name and run all activities through that, and do the simple calculation for HST for ease.

Cheers
I found CRA themselves were quite helpful. I had a lengthy discussion with one of their agents about how to set up the HST with the second business. He was the one that told me to do it that way. Might be worth a call to get their advice - that is free and it will at least highlight any potential issues with your particular situation.
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Old Feb 16th 2020, 11:05 pm
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Default Re: Register own small business

Hi all,

​​​​​​First time poster on here, so don't be too harsh..

I'm a NZ/Canadian dual citizen who has been living in the UK for the last 8 years (and will get British citizenship in the next few months too!) my kids will be lucky...

I'm moving to Toronto in October and will be working as a consultant for my UK company for at least six months. I have looked at a few remote working threads here so think I'm OK with the overall process, I guess I'm just short on the what I actually need to do first up. Do I need a business identification number? Hst /gst number? I won't make 30k by end of the calendar and tax year, but if I work next year I will, so is it worth just sorting that out now? Anything else I should do before getting there? I want to start working as soon as I get there.

Thanks for any help!
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