Top GST/HST Filing Errors That Trigger CRA Reviews
Many small businesses make common GST/HST mistakes that can easily trigger a CRA review. One of the biggest issues is misreporting taxable versus exempt sales, especially for companies offering mixed services. Another frequent error occurs when businesses apply the wrong tax rate based on province or transaction type. Input tax credit (ITC) mistakes — such as claiming ineligible expenses, missing receipts, or duplicating ITCs — are also major red flags. Late filings, incorrect filing frequencies, or failing to remit collected GST/HST on time further increase scrutiny. These GST/HST filing errors often happen due to poor bookkeeping or misunderstanding of CRA rules, but they can lead to penalties, interest, or a full audit.
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Common GST/HST Mistakes
- Charging the wrong GST/HST rate for your province or service type
- Misclassifying sales as taxable, exempt, or zero-rated
- Claiming ineligible or unsupported input tax credits (ITCs)
- Forgetting to remit collected GST/HST on time
- Filing returns late or using the wrong filing frequency
- Mixing personal and business expenses when claiming ITCs
- Reporting income and GST/HST amounts that don’t match bookkeeping records
- Failing to adjust GST/HST for refunds, discounts, or credit notes
- Incorrectly handling GST/HST for online, out-of-province, or international sales
- Poor record-keeping leading to inconsistent or incomplete filings
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How to Fix GST/HST Mistakes Before Filing With the CRA
The best way to fix GST/HST mistakes is to review your records thoroughly before submitting your return. Start by ensuring that all sales are correctly categorized as taxable, exempt, or zero-rated. Cross-check your ITC claims with original receipts and make sure all expenses are business-related and eligible under CRA guidelines. Reconcile bank statements with sales and purchases to eliminate inconsistencies. If you discover incorrect tax rates or misapplied codes, adjust your calculations before filing. For late filings or missed remittances, submit the return as soon as possible to reduce penalties. Using accounting software and organized digital records also helps prevent GST/HST filing errors from appearing in the first place.
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When to Seek Professional Help for GST/HST Filing Errors
It’s wise to seek professional support when you’re dealing with complex transactions, mixed tax categories, or repeated GST/HST mistakes. A tax professional can help verify whether your business is applying the correct tax rates, claiming ITCs properly, and filing returns according to CRA requirements. If you’ve received a CRA review letter or notice of discrepancy, getting expert advice becomes even more important. Specialists can correct past GST/HST filing errors, assist with voluntary disclosures, and prepare accurate amended returns if needed. For businesses that regularly struggle with bookkeeping or experience rapid growth, ongoing professional oversight can significantly reduce the risk of future reviews or audits.
FAQ
1. What are the most common GST/HST mistakes small businesses make?
Misclassifying sales, claiming ineligible ITCs, using incorrect tax rates, and filing late are among the most frequent errors.
2. Can I correct GST/HST filing errors after submitting my return?
Yes. You can file an adjustment or use CRA’s My Business Account portal to correct errors.
3. Will GST/HST mistakes automatically trigger a CRA audit?
Not always, but repeated or significant errors increase the likelihood of a review or audit.
4. How long does the CRA take to review GST/HST discrepancies?
Most reviews take 30–90 days depending on the complexity and how quickly documents are provided.
5. Should I hire a professional for minor GST/HST issues?
Minor errors can be fixed independently, but complex or repeated mistakes benefit from professional support.