Quick Method of accounting

The Quick Method of accounting is a simple way to calculate the GST/HST you have to remit. It is generally available for small businesses with annual worldwide taxable sales or supplies (including GST/HST, zero-rated supplies, and associated business supplies) of no more than $200,000 in any four consecutive fiscal quarters over the last five fiscal quarters. The $200,000 limit does not include the following:

• supplies of financial services;
• sales of real property;
• sales of capital assets; and
• goodwill.

Certain businesses cannot use the Quick Method of accounting, some of which are:

• accountants or bookkeepers;
• financial consultants;
• lawyers (or law offices);
• actuaries;
• notaries public;
• listed financial institutions;
• audit services; or
• tax return preparation services or tax consultants.

When you use the Quick Method, you still charge GST/HST on your taxable supplies of goods and services. However, to calculate the amount of GST/HST to remit, you multiply the amount of your GST/HST-included supplies for the reporting period by the Quick Method remittance rate, or rates, that apply in your situation.

The remittance rates are less than the GST/HST rates of tax that you charge. This means that you remit only a part of the tax that you collect, or that is collectible. Since you cannot claim input tax credits (ITCs) on most of your purchases when you use this method, the part of the tax that you keep accounts for the approximate value of the ITCs you would otherwise have been entitled to claim.

If you use this method, you have to continue using it for at least a year. For more information on how it works and what remittance rate(s) to use, see Booklet RC4058, Quick Method of Accounting for GST/HST.

You can choose to use this method by completing Form GST74, Election and Revocation of an Election to use the Quick Method of Accounting and submitting it to your tax services office.

Forms and publications

• Booklet RC4058, Quick Method of Accounting for GST/HST
• Form GST74, Election and Revocation of an Election to use the Quick Method of Accounting
• GST/HST Info Sheet GI-017, GST/HST Rate Reduction - Streamlined Methods of Accounting for Small Businesses
• GST/HST Info Sheet GI-041, The 2008 GST/HST Rate Reduction and Streamlined Methods of Accounting for Small Businesses