A friend who has HST number for UBER also worked as a Background Performer, for which he didn't get paid HST. Can he claim ITC and put that income as exempt on GST34?

Question

A friend who has HST number for UBER also worked as a Background Performer, for which he didn't get paid HST. Can he claim ITC and put that income as exempt on GST34?

My question is: can he still claim the ITC for the expenses paid while doing his job as background performer even though his income (on T4A) does not include HST?

hide info

5 comments

Thanks for your reply. Actually for Uber drivers (taxi services) is mandatory to declare HST return even though their income is less than 30K. So I have to declare his HST and ITC for Uber. Now, he also worked as background performer/actor (making less than 30k). My question is: Should I use the same HST number and declare his income (No HST paid to him) as BGP on the HST return together with his UBER income?

Staurus

Based on the information you provided, it sounds like your friend may not have disclosed to his background performer job that he was registered for HST.  If he is registered for HST, then he should be collecting HST on all taxable income.

When you ask in your original question "Can he claim ITC and put that income as exempt on GST34", I don't believe performing work would be considered an exempt supply.  Even if it was an exempt supply, you usually cannot claim ITCs on exempt income.  From RC4022 (https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4022/general-information-gst-hst-registrants.html#H1_106):
"Some supplies are exempt from the GST/HST – that is, no GST/HST applies to them. This means that you do not charge the GST/HST on these supplies of property and services, and you are generally not entitled to claim input tax credits on property and services acquired to provide these supplies".

I believe what should have happened is he should have collected HST on ALL income and claimed the ITCs on the respective expenses.  As this didn't happen, I would play it safe by not claiming ITCs on expenses related to the performing.  If CRA reviews this return, your friend may also end up being liable to remit the HST that should have been collected.

Tyler

Thank you so much, Tyler. You covered all my questions.

Staurus

Tyler is correct, and I have seen this exact situation play out with CRA. When registered for HST in your personal name ALL sources of self-employment are deemed to be taxable supplies (assuming of course they are taxable supplies) irrespective of the $30,000 voluntary registration rule. It doesn't matter if you prepare more than one T2125, CRA views them all as one. the client actually has to self-report that the income he received was inclusive of GST/HST. But yes, they can claim the associated ITC.

Debbie R

Thanks for your input. Will do that!!

Staurus

More Actions

People come to ProFile for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:

Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.

Answer guidelines

Answer 1

Answer

Where are you going with this.

Is it a different job where he make less than 30,000 Ann and with the other job does he make more than the 30,000 then yes he must collect HST from both jobs, he has to claim HST on all his income of self employment (T4A)

Once he claims the HST collected on all revenues, then yes he can claim ITC from all jobs

Was this answer helpful? Yes No

jim

Answer 2

A friend who has HST number for UBER also worked as a Background Performer, for which he didn't get paid HST. Can he claim ITC and put that income as exempt on GST34?

Answer

No answers have been posted

More Actions