Valley First

Get Ready For GST/PST Return

Small businesses re-registering and readying for GST/PST return
March 15, 2013

Penticton, B.C.—With the transition back to GST and PST just around the corner, small businesses across B.C. are preparing for the re-introduction of the two-tax system.

Ahead of the April 1, 2013 change, the Ministry of Finance has been contacting businesses previously registered under the old GST/PST system. According to Jon Milligan of White Kennedy LLP, Chartered Accountants, many established companies are familiar with GST and PST—it is new companies that may face greater challenges.

“A lot of new businesses have opened since the HST introduction on July 1, 2010 and they still need to register for PST,” says Milligan. “It’s these businesses that could potentially fall through the cracks during the transition process.

“Most established businesses have the information to ensure they re-program their cash registers, point-of-sale systems and bookkeeping procedures to change back to the two tax rate system. However, new businesses that are unfamiliar with the PST system may face some additional challenges.”

While the April 1 return to GST and PST has been well documented, being unprepared may mean potentially missing out on tax breaks allowed under the HST system. For example, Milligan advises small business owners to review any capital purchase requirements and consider whether it makes sense to buy before April 1.

“After March, the seven per cent PST will be non-recoverable on capital purchases, so there is a substantial savings on the bigger ticket items if bought in March under the HST system. It’s also good to review your product line and ensure you know what will be PST taxable after March and what will be PST exempt. The provincial government has provided some good resources in this regard, such as www.pstinbc.ca.”

Valley First’s assistant vice-president of commercial banking Roger Houle believes the transition back to GST and PST has come about rapidly for small business owners.

“Small business owners face many challenges larger companies can avoid,” says Houle. “They are often the bookkeeper, sales force, HR and IT departments all rolled into one. With all the demands on the small business owner, while it may have an impact on the business, it is understandable that the switch back to GST and PST has crept up on many people.”

“At Valley First, we encourage all our small business members to work closely with their accountants, especially during tax time and when there are significant market changes. We also partner with many other professionals, such as accountants and lawyers, to ensure our small business owners have access to the information they need to make their companies successful.”

Milligan offers a final piece of advice to small business owners. “We’ve been asked a lot about whether one pro-rates the tax for services that span the change-over date,” says Milligan. “The short answer is, no. The date on an invoice, or when the invoice should have been issued, dictates whether HST or GST and PST are payable. If you are a small business owner, it’s important to speak to your accountant to ensure you are ready for the April 1 transition.

About Valley First

Valley First is a division of First West Credit Union, B.C.'s third-largest credit union, which has 38 branches and 29 insurance offices throughout the Lower Mainland, Fraser Valley, Kitimat and Okanagan, Similkameen and Thompson valleys. First West has approximately $6.6 billion in assets under administration, 169,000 members and 1,300 employees.

Have a question? We can provide you with the information you're looking for.

Online

Use our contact form to send us a message—we'll be sure to reply to you with the details you're looking for shortly.

In Person

If you're more comfortable coming in to see us, we'd be happy to chat with you about the questions you have.

By Phone

If you’d like to call us, here is a complete list of our branch and insurance office numbers.

 

 

Social Feed

Visit us on Facebook or Twitter

Sign up for our e-Newsletter