To help streamline communications between businesses and the Canada Revenue Agency, the CRA requires many businesses to obtain a business number. However, not every business needs one. In some cases, as a self-employed individual, you may be able to use your Social Insurance Number (SIN) instead. This is often the case if you are working as a subcontractor or commission salesperson for an employer who issues you a T4A tax slip with an amount in Box 20 or Box 48.
Are You Required to Have a Business Number?
The CRA requires some businesses to sign up for a business number. In particular,
- if you hire employees and have payroll,
- need to set up an import/export account,
- have a corporation,
- or you exceed the $30,000 small supplier threshold for GST/HST,
you need to register for a business number with the CRA. This helpful article from TurboTax explains the requirements in greater detail: What is a Business Number? How do I Know if I Need One?
GST/HST Considerations
If you sell taxable goods or services as part of your business, you generally have to open a GST/HST account with the CRA and register for a business number. However, the CRA waives the requirement for small suppliers.
Small suppliers are businesses with worldwide revenues less than $30,000 over the last four consecutive quarters. This revenue limit lifts to $250,000 for charities and public institutions.
The $30,000 limit does not apply to your profits. It simply takes into account your revenues, the money you brought in regardless of expenses or other considerations.
Identifying GST/HST Small Suppliers
To determine if your business fits the criteria to be considered a small supplier, you must add up your revenues for the last four quarters at the end of each quarter. If the total is less than $30,000, you do not have to register for a business number.
However, if the total exceeds $30,000, you must register for a business number within 30 days of the sale that popped you over the limit, and you must begin collecting GST/HST on the date of that sale, even if you were not required to collect it previously.
This link to the CRA article: When to Register for and Start Charging the GST/HST, provides the calculations and examples to help determine if you are required to register for the GST/HST and when that registration takes effect.
Opting to Register for a Business Number
Simply because you are not required to have a business number doesn’t necessarily mean you don’t want one. For example, if you sell items or services and collect GST/HST, you may want to sign up for a business number and remit HST/GST payments so that you can qualify for the GST/HST rebate at the end of the year.
Social Insurance Number
If you don’t need or want a business number, you can refer to your business using your SIN. This scenario typically occurs when you are a self-employed person, such as a contractor, a freelance writer or a daycare provider.
To file your income tax return using your SIN to identify your business, note your SIN on Form T2125, Statement of Business or Professional Activities. For detailed information on the T2125, consult Guide T4002, Business, and Professional Income.
This form has a spot for your SIN on the top right next to your name. Immediately below that is a space for your account number (your business number plus an identifying code for the type of accounts such as payroll or GST/HST and an additional four-digit number); leave these spaces blank.
Which TurboTax is right for me?
TurboTax Self-Employed helps you easily manage your business earnings and expenses. However, if you feel a bit overwhelmed, consider TurboTax Live Assist & Review, Self-Employed, and get unlimited help and advice as you do your taxes, plus a final review before you file. Or, choose TurboTax Live Full Service for Self-Employed* and have one of our tax experts do your return from start to finish.
*TurboTax Live™ Full Service is not available in Quebec.
