You crossed the $30,000 GST/HST threshold and didn't register in time. Maybe you didn't realize you'd crossed it. Maybe you knew but kept putting it off. Either way, you're past the 29-day registration window.
Here's what actually happens — and how to fix it.
What the CRA can assess
The CRA can go back and assess you for GST/HST on every taxable supply you made after you crossed the threshold, whether or not you collected it from your clients.
This is the painful part. You invoiced $5,000 to a client without charging HST? The CRA can still say you owed HST on that $5,000 — typically 13% in Ontario, or the applicable rate in your province. That's $650 you'd owe out of pocket, because you can't go back and collect it from a client you already invoiced.
Penalties and interest
Late registration carries two charges:
- Late-filing penalty: 1% of the net tax owing, plus 25% of that 1% for each month late (up to 12 months)
- Interest: Compound daily interest on any outstanding amounts at the prescribed rate (currently around 9-10% annually)
The penalties aren't catastrophic if you catch it early. A month late on a $2,000 tax bill means roughly $20-25 in penalties. Six months late gets more serious. Years late can compound significantly.
What to do right now
Register immediately. The longer you wait, the more penalties and interest accumulate. You can register online through the CRA Business Registration Online (BRO) portal at canada.ca, by phone at 1-800-959-5525, or through My Business Account.
When you register, the CRA will ask for your effective registration date — the date you should have registered (when you first crossed the threshold). Use that date, not today's date.
Voluntary disclosure
If you've been unregistered for a long time and owe significant back taxes, the CRA's Voluntary Disclosures Program (VDP) lets you come forward proactively and potentially reduce penalties. Conditions apply — the CRA must not have already contacted you about the issue. If you're in this situation, talk to an accountant before approaching the CRA.
Can you collect HST retroactively from clients?
Generally no — at least not easily. If your contract with a client didn't include HST, you can't usually go back and demand it. Some contracts include a clause saying GST/HST is "in addition to" the stated fee, which helps. But for past invoices already paid, you'll typically absorb the cost.
For all future invoices, start charging HST immediately on your effective registration date.
How to avoid this happening again
The root cause is usually not tracking the rolling 12-month window correctly. Most people look at their calendar year total and think they're safe — but the threshold resets on a rolling basis, not January 1.
Tracking the rolling window in a spreadsheet requires some care. HST Hero does it automatically — you log your revenue entries and it maintains the correct sliding window, shows you how close you are to the threshold, and estimates the date you'd cross at your current pace. The goal is to know weeks in advance, not days after.
The short version
- Register immediately — penalties grow with time
- Use your actual effective date, not today
- The CRA can assess HST on revenue you didn't collect
- Voluntary disclosure helps if you've been late for a long time
- Start charging HST on all invoices from your effective date forward