GST Filing Mistakes to Avoid: A Guide for Canadian Businesses

Avoid common GST filing mistakes that can lead to incorrect returns, missed input tax credits, penalties, and unnecessary tax stress for your business.

9/10/20267 min read

GST/HST filing is an important responsibility for Canadian businesses registered for GST/HST. Your return needs to accurately report the tax you collected or were required to collect, as well as eligible input tax credits (ITCs) and other amounts that affect your net tax.

Even a small bookkeeping error can create problems when numbers from your sales records, invoices, bank accounts, and GST/HST return do not match.

The good news is that most GST filing mistakes are preventable when you maintain organized records and review your return before submitting it.

Here are some of the most common GST/HST filing errors Canadian businesses should watch for.

1. Missing the GST/HST Filing Deadline

One of the simplest mistakes is filing late.

CRA filing and payment deadlines depend on your reporting period. For monthly and quarterly filers, the deadline is generally one month after the end of the reporting period. Annual filers generally have different deadlines depending on their business structure and circumstances.

Missing a deadline can result in penalties and interest.

Instead of waiting until the deadline approaches, add GST/HST filing dates to your bookkeeping calendar and prepare your records throughout the reporting period.

2. Reporting the Wrong Sales Amount

Your GST/HST return should be based on accurate sales records.

A common mistake is using a bank deposit total instead of properly calculating taxable sales. Bank deposits may include amounts that are not sales, while sales may also have been recorded before the money was deposited.

The CRA notes that the invoice date can determine the reporting period for GST/HST charged, so businesses should not simply rely on when a customer payment reaches the bank account.

Your bookkeeping system should clearly distinguish:

Taxable sales
Zero-rated supplies
Exempt supplies
GST/HST collected
Other non-sales deposits

Keeping these categories separate makes GST/HST filing much easier.

3. Claiming Input Tax Credits Without Proper Documentation

Input tax credits can reduce the amount of GST/HST your business has to remit, but you need appropriate documentation to support your claims.

The CRA requires businesses claiming ITCs to keep purchase invoices, receipts, or other supporting documents. Certain information must appear on supporting documentation depending on the transaction amount.

For example, your records may need to identify the supplier, GST/HST registration number, transaction details, amount of GST/HST, and other required information.

Don't assume that every business expense automatically qualifies for an ITC.

Before claiming an ITC, make sure the expense is eligible and that you have the documentation needed to support it.

4. Claiming GST/HST on Personal Expenses

Another common GST filing mistake is treating personal spending as a business expense.

A business owner may use the same credit card or bank account for both business and personal purchases. If these transactions are not separated properly, personal expenses can accidentally make their way into the GST/HST return.

This can lead to inaccurate ITC claims.

Keep business and personal expenses separate whenever possible. If you have mixed-use expenses, maintain clear records showing the business portion and how you calculated it.

5. Using the Wrong GST/HST Rate

GST/HST rates can depend on the type of supply and where the supply is considered to have been made.

Using the wrong tax rate can cause you to collect too much or too little GST/HST from customers and report incorrect amounts on your return.

The CRA explains that place-of-supply rules help determine which GST/HST rate applies to a taxable supply.

Businesses operating across different provinces should pay particular attention to these rules rather than assuming that the same rate applies to every customer.

6. Forgetting to Record GST/HST Collected

Some businesses record the total customer payment as revenue without properly separating the GST/HST component.

For example, if a customer pays an invoice that includes GST, the full payment should not simply be treated as business income.

Your bookkeeping should distinguish between:

Business revenue + GST/HST collected = Customer payment

The GST/HST portion is generally an amount the business collects and later accounts for through its GST/HST return. The CRA describes collected GST/HST as an amount that registrants are responsible for holding in trust until it is remitted.

Proper bookkeeping prevents GST/HST from being confused with business revenue.

7. Missing Eligible Input Tax Credits

Not all GST filing mistakes result in overclaiming.

Some businesses underclaim ITCs because they lose receipts, overlook expenses, or fail to properly record GST/HST paid on eligible business purchases.

This means the business may remit more GST/HST than necessary.

Good bookkeeping helps identify eligible business purchases and ensures supporting documentation is available before filing.

Organized records can also help businesses identify deductions and ITCs they might otherwise overlook.

8. Failing to Reconcile GST/HST Accounts

Before filing, compare your GST/HST records with your accounting software, invoices, bank transactions, and previous return.

A GST/HST reconciliation can help identify:

Missing sales
Duplicate transactions
Incorrect tax rates
Missing ITCs
Incorrect journal entries
Transactions recorded in the wrong reporting period

This step is especially important if multiple people enter transactions into your accounting system.

A quick reconciliation before filing can prevent much larger problems later.

9. Ignoring Incorrect Invoices

Your supplier invoices are an important part of your GST/HST records.

If an invoice does not contain the information required to support an ITC, you may have difficulty supporting the claim during a CRA review.

The CRA states that businesses need correct information on supplier invoices to support ITC claims.

If an invoice looks incomplete, contact the supplier and request the appropriate documentation before claiming the GST/HST.

10. Not Keeping GST/HST Records

Filing a GST/HST return does not mean you can discard the supporting documents.

The CRA generally requires businesses to keep GST/HST records for six years from the end of the year to which they relate. Records can include sales invoices, purchase invoices, receipts, financial records, and working copies of electronically filed returns.

Electronic records can also be used, but businesses still need to maintain readable records and supporting documentation.

A consistent digital filing system can make this much easier.

11. Filing Without Reviewing the Numbers

Another avoidable GST filing mistake is submitting a return immediately after entering the final transaction.

Take time to review the return before filing.

Ask:

Does total revenue match my bookkeeping records?
Does GST/HST collected look reasonable?
Are all eligible ITCs supported?
Are personal expenses excluded?
Are transactions recorded in the correct period?
Does the GST/HST payable or refund amount make sense?
Did I reconcile the GST/HST accounts?

If something looks unusually high or low compared with previous periods, investigate before submitting the return.

12. Assuming a GST/HST Error Cannot Be Fixed

Mistakes can happen even when you have good bookkeeping processes.

If you discover an error after filing, don't simply submit another return for the same reporting period. The CRA provides an adjustment process for correcting GST/HST returns that have already been filed. Businesses can make eligible adjustments through their CRA account or provide adjustment information by mail.

If an error could result in penalties or involves a significant amount, consider getting professional tax advice before making the correction.

A Simple GST/HST Filing Checklist

Before submitting your GST/HST return, review the following:

Confirm your reporting period.
Check your filing and payment deadline.
Reconcile sales with your accounting records.
Verify GST/HST collected.
Review eligible ITCs.
Check supplier invoices and receipts.
Remove personal expenses.
Confirm applicable tax rates.
Reconcile your GST/HST accounts.
Save a copy of your completed return.
Keep supporting documents for the required retention period.

This simple process can reduce many common GST filing errors.

How Bookkeeping Can Prevent GST Filing Mistakes

Accurate GST/HST filing starts with accurate bookkeeping.

When transactions are recorded consistently throughout the year, you don't have to rebuild your records at the end of every reporting period.

Professional bookkeeping can help your business:

Categorize transactions correctly
Track GST/HST collected
Identify eligible ITCs
Reconcile accounts
Maintain supporting documents
Prepare financial reports
Keep GST/HST records organized

The CRA emphasizes that complete and organized records help businesses support their tax filings and can make reviews or audits easier.

For small businesses, this can save considerable time and reduce the risk of avoidable filing errors.

When Should You Get Professional GST/HST Help?

You may want professional support if your business:

Has multiple GST/HST reporting periods
Operates in more than one province
Has complicated sales transactions
Makes significant purchases
Claims substantial ITCs
Has mixed business and personal expenses
Has fallen behind on GST/HST filings
Discovered errors in previous returns
Has received a CRA review request

A bookkeeper or tax professional can help you maintain accurate records and identify issues before they become larger problems.

How TiKi Tax Can Help

At TiKi Tax, we help Canadian businesses keep their bookkeeping and tax records organized so GST/HST filing becomes more straightforward.

Our services can support businesses with bookkeeping, GST/HST filing, financial records, tax preparation, and ongoing accounting needs.

Instead of rushing to organize everything before a GST/HST deadline, you can build a consistent bookkeeping process throughout the year.

Learn more about TiKi Tax and explore the bookkeeping and tax services available for Canadian businesses.

Final Thoughts

Avoiding common GST filing mistakes starts with accurate bookkeeping and organized documentation.

Late filing, incorrect sales figures, unsupported ITCs, personal expenses, incorrect tax rates, and poor record keeping can all create unnecessary problems.

The best approach is simple: record transactions consistently, reconcile your GST/HST accounts, maintain proper supporting documents, and review your return before filing.

If your GST/HST filing has become difficult to manage, professional bookkeeping support can help you stay organized and reduce the risk of costly errors.

Frequently Asked Questions

1. What are the most common GST filing mistakes?

Common GST filing mistakes include filing late, reporting incorrect sales, claiming unsupported ITCs, using the wrong GST/HST rate, including personal expenses, and failing to maintain proper records.

2. Can I correct a GST/HST return after filing?

Yes. If you discover a mistake on a GST/HST return you already filed, the CRA provides procedures for adjusting the return. You generally should not file a completely new return for the same period.

3. How long should I keep GST/HST records?

The CRA generally requires GST/HST records to be kept for six years from the end of the year to which they relate, although certain situations can require longer retention.

4. Can I claim an ITC without a receipt?

You need appropriate supporting documentation to support an ITC claim. The documentation requirements can vary depending on the transaction, so businesses should maintain invoices, receipts, or other acceptable records.

5. What happens if I file my GST/HST return late?

Depending on the circumstances, the CRA may charge penalties and interest when a return or amount owing is not received by the applicable deadline.

6. How can bookkeeping help with GST/HST filing?

Good bookkeeping helps track sales, GST/HST collected, eligible ITCs, expenses, and supporting documents throughout the reporting period. This makes it easier to reconcile your accounts and prepare an accurate GST/HST return.