What to take away
- If you were required to charge GST/HST and did not, the liability is yours, and it belongs on the return for the period in which you should have charged it.
- Fix the facts first: the date you crossed the small supplier threshold, the sales since then and the rate that applied to each one.
- Acting early matters. Late-filing penalties grow by the month, and the Voluntary Disclosures Program only applies while the application is still voluntary, meaning no audit or investigation has begun on the same information.
Confirm that you were actually required to charge
Start with the question underneath the worry. You generally have to register for GST/HST if you are not a small supplier and you make taxable supplies in Canada. A small supplier has not exceeded $30,000 in taxable revenue over four consecutive calendar quarters, counting your associates’ revenue where it applies. Below that, you are not required to register or charge, although you may choose to register voluntarily.
If you were under the threshold the whole time, there may be nothing to correct. If some sales were zero-rated or exempt, the same applies to those sales. The problem described in this article is narrower: taxable sales, made while you were required to be registered, on which no tax was charged. Our registration checker and the GST/HST registration questions guide can help you test your own numbers.
Find your real start date
The CRA ties your obligation to a specific date, so work that out before anything else. If you exceeded $30,000 in a single calendar quarter, you stopped being a small supplier on the supply that took you over the limit, and you had to charge tax on that supply even if you were not yet registered. You then have 29 days from that date to register. If you went over the limit across up to four quarters, you stopped being a small supplier at the end of the month after the quarter in which you crossed it, and your effective date is the first supply you made after that.
The CRA’s published examples show how precise this is: crossing the limit in one quarter makes the very sale that crossed it taxable, while crossing it gradually over several quarters moves the start date to the first sale after the end of the month following the quarter. Many late registrants discover that the real start date was several months before they noticed. Pull your sales by month and by customer, and mark the first taxable sale after the threshold date.
The liability stays with you
The CRA states that a person who was required to charge GST/HST but did not is still liable for the tax, and must include it on the return for the reporting period in which the tax should have been charged. Tax you should have charged is therefore reported in the earlier period it belongs to, not in the period you noticed the mistake.
The CRA also describes GST/HST you collect as held in trust until you remit it. That is one reason the money is not treated like ordinary business income when you plan cash. If you have not yet registered, the first step is to register and then file for each period you missed. Once registered, you must file a return for every reporting period, even when there is nothing to report, because a missing return is a compliance problem even when no tax is owing.
Work out what you owe
Build a schedule of every taxable sale since your effective date: invoice date, customer, province or place of supply, amount and the rate that should have applied. The rate depends on where the supply is made, not only on your own province. Ontario is 13% HST, and Nova Scotia has been 14% since April 1, 2025. Our article on charging GST/HST to customers outside Ontario explains how to choose the rate.
Here is a simple illustration. Suppose a consultant billed $20,000 of taxable services to Ontario clients over a stretch when registration was required, and charged no tax. At 13%, the tax on that price is $2,600. The same table also shows a decision you should not guess at: where a customer was quoted a flat price, whether the tax is calculated on top of it or treated as part of it can change the figure. Raise that point with your accountant before you file. The numbers here are illustrative only.
Claim the credits you are entitled to
Registration also opens the door to input tax credits on business purchases that relate to your taxable sales. Software, advertising, supplies and professional fees can all carry GST/HST that you may be able to recover, provided you have supporting documents. In most cases the CRA gives registrants up to four years to claim credits they did not claim earlier.
That can reduce the amount you owe. Be careful not to rely on it too heavily: credits depend on the invoices you have, on how much of each purchase relates to taxable activity and on the registration timing rules. Gather supplier invoices for the same period as the sales, and ask which ones qualify before you enter them. Our input tax credit entry and the article on keeping GST/HST visible in your cash planning cover the mechanics.
What late filing can cost
A late GST/HST return that has an amount owing generally carries a failure-to-file penalty of 1% of the amount owing, plus 0.25% of the amount owing for each complete month the return is overdue, to a maximum of 12 months. If the CRA issues a demand to file and you still do not file, a $250 penalty applies. Interest may also be charged on amounts that are paid late. A penalty for failing to file a GST/HST return is not deductible for income tax.
Illustration: if the amount owing on a late return is $2,600 and the return is three complete months late, the penalty is 1% ($26) plus three months at 0.25% ($6.50 each), or $45.50 in total. The numbers are illustrative; interest is on top. The takeaway is that the tax itself is the larger cost, and delay increases the extras every month.
Penalty relief: the Voluntary Disclosures Program
The Voluntary Disclosures Program lets you correct errors or omissions and ask for relief from penalties and interest. Changes took effect on October 1, 2025, and applications prompted by CRA communications can now be eligible too, at a lower level of relief. The program does not forgive the tax itself, which is still owing. Under the program, an unprompted application is normally eligible for 75% interest relief and 100% penalty relief, while a prompted application is normally eligible for 25% interest relief and up to 100% penalty relief. Relief is discretionary and decided case by case.
To qualify, the application must be voluntary, include information that relates to a period at least one year past its filing due date and involve an error or omission with interest, penalties or both. It is not voluntary if an audit or investigation has already started on the same information. You apply on Form RC199 and need to include payment or a payment arrangement request for the estimated tax owing. For GST/HST, the CRA asks for supporting documents covering the most recent four years, leaving out any periods that had no errors. If the program does not fit, the CRA’s taxpayer relief provisions are a separate route for penalties and interest in some circumstances.
Steps to take now, and what to bring
Register if you have not already, using the effective date you have worked out, and update your invoicing so the next sale is correct. Customers must be told whether GST/HST is included in the price, or be shown the amount or the rate; for HST, show the total HST rate. Then assemble your sales schedule, purchase invoices, bank deposits and any contracts that fix price or tax treatment.
Bring those to an accountant before you file or apply, particularly if there are several periods, mixed zero-rated and taxable sales or contact from the CRA. Sora’s GST/HST service includes registration questions and return preparation, and overdue filings are a matter to discuss with the team. A professional can help you decide between filing the missed periods directly and applying for voluntary disclosure, which depends on timing and the facts.
Sources & editorial notes
Sources checked October 24, 2026. The examples are illustrative and provide general information. Discuss how the guidance applies to your circumstances with your accountant.
- General information for GST/HST registrantsCanada Revenue Agency
- When to register for and start charging GST/HSTCanada Revenue Agency
- Input tax creditsCanada Revenue Agency
- Charge and collect the GST/HSTCanada Revenue Agency
- IC00-1R7, Voluntary Disclosures ProgramCanada Revenue Agency
- Changes to the Voluntary Disclosures ProgramCanada Revenue Agency
- Cancel or waive penalties and interest at the CRA: who can applyCanada Revenue Agency
- Which GST/HST return to use in your situationCanada Revenue Agency
Rules and guidance can change. Use the current official source and confirm the treatment for your facts. To flag an error, contact Sora.