Snow Day from Business Program

Well, this was unexpected. A snow day. My plans were to complete a three-day business program today, but I received word before 7:00 am that due to hazardous road conditions, it was postponed until next Saturday.

Today we were going to delve into marketing. I was looking forward to it more than the ‘business side’ of business. The business side of business is often the side many like to forget about, ignore and put off until they absolutely have to deal with it.

You know what I mean: bookkeeping, accounting and taxes.

I’ve learned a lot in the past two days about all three of these items. I am still far from being an expert, but I have a better grasp of keeping track of my financial responsibilities. This will not only help me in my new soap-making adventure, but with my writing, publishing and personal finances.

I would recommend anyone going into self-publishing to take one of these programs. Sometimes they are offered for free through your employment centre. Other times you can find them listed in night course programs (We call them continuing education in Nova Scotia). Local business organisations may offer them. I was told local commerce groups hosts similar workshops periodically. In fact I’m signing up for a marketing workshop hosted by our local group.

Although you might find one for free, more than likely you’ll need to pay a small fee to attend. Sixty bucks, however, is a great investment in your self-publishing company if it’s going to save you money and headaches, and get more sales.

So what did I learn? Lots of stuff. Such as, did you know if you use your vehicle to get you around for business (that might be to pick up printer ink, deliver writing-related mail to the post office or attend a book launch), you can claim a certain percentage? You’ll need to keep track of your mileage and keep all related receipts (gas, repairs, registration, etc.) and do the paper work for Canada Revenue, but if you use your vehicle a lot, it may be worth putting forth the extra effort.

Deductible items and how to claim them are outlined in the Business Guide. You can find the booklet online at Canada Revenue Agency. It’s also available in print form.

HST: The harmonised sales tax. The curse of many Nova Scotians is on many goods that are deemed ‘luxury items’. That includes your chocolate bar, vehicle purchase and telephone bill. As a company, you have to collect this 15% tax if you make over $30,000 in four consecutive quarters of business.

This is not to be confused with $30,000 in a given year.

The government doesn’t work that way. That would be too simple. And they want to trip you up at every opportunity.

So here’s how this works. A quarterly in business is three months long (the year divided into four equal parts): January to March, April to June, July to September and October to December.

Let’s say your earnings go like this:

January to March: $2,000

Total made in this quarter: $2,000

April to June: $5,000

Total made in these two quarters: $7,000

July to August: $15,000

Total made in these three quarters: $22,000 (you still haven’t reached $30,000)

September to December: $5,000

Total made in these four consecutive quarters: $27,000

At the end of this year, you have made less than $30,000, so you’re thinking, no worries; I don’t have to register to get an HST number. You might even think that, hey, we start again at zero in January.

Wrong.

Let’s continue:

January to March: $5000

Total made in these past four consecutive quarters: $25,000

April to June: $12,000

Total made in the past four consecutive quarters: $32,000

Congratulations, business has been good, and now you have to start collecting HST from your customers, saving it under your bed and handing it over to the government when they ring your doorbell.

The good thing about this is that as soon as you know you are going to reach that $30,000 limit, you can register for an HST number and continue on with business without too much pain in the wallet.

However (WARNING), if you do not recognise this marker stone in your business and do nothing, you may (probably will) have a huge pain in your wallet. I believe you have 30 days (don’t quote me on this), to register with HST when your sales reach $30,000 without penalty. In other words, you won’t be held responsible for the HST you didn’t collect on your first $30,000 in sales in four consecutive quarters.

If you fail to take action, after thirty days you may (probably will) be held responsible for $30,000 worth of HST. That’s $4,500 that could have went to publishing another book.

And on that note, I’m off to tend to the creatures in my backyard who are probably feeling a wee bit of the sting of -19 degrees Celsius even though they had an extra thick layer of straw added to their bedding last night.

 

**NOTE: I am not a tax expert. All advice given is provided for your entertainment only. You have to do the research and see what laws and regulations govern business where you live. I am not responsible if you complete your taxes incorrectly. I am responsible only for my incorrectly completed tax forms.

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2 thoughts on “Snow Day from Business Program

  1. Thanks Di for sharing your great findings as always. I’ve missed you around. 🙂 And so to reiterate, the first 30 K has no penalty? We don’t have to collect anything until we hit 30K? And, if we are writers, who exactly are we collecting GST from?

  2. Thanks Diane, you have provided vital information. While you have winter, here in Northeastern BC we are having snow melting days. A nice little break for us.

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