How to get a CRA business number

Why read this?

• › Your client has a new business
• › Your client operates a small business

Before registering

• Ensure your client has decided the business’ name, location, mailing address, legal structure, fiscal year-end and estimated gross sales.
• Your client should decide which CRA accounts her business needs: e.g., if she won’t have any employees, she doesn’t need a payroll account.
• CRA recommends registering just before the business launch, so it meets obligations like filing returns and paying taxes.
• Richard Beeny, associate partner, private mid-market practice at EY, agrees, adding business owners should register before incurring major expenses to be eligible for the GST/HST credit.

Why register?

• It helps CRA and the business “simplify their dealings with each other, as well as with all levels of the public sector,” says the agency, because CRA accounts can be easily linked to the business through its business number.
• Your client’s business can claim the input tax credit, which refunds GST or HST on certain expenses.
• Your client’s business needs CRA accounts for payroll, corporate income tax, sales tax or import/export tax.

Note: If she’s previously registered her business for one of the above, CRA has already assigned a business number.

Note: If she’s registered the business in Ontario, British Columbia, Manitoba, New Brunswick, Nova Scotia or Saskatchewan, she’ll automatically get a CRA business number.

What to do

Your client can register online if the business meets certain criteria (see “Online registration conditions,” next page).

To do this, she’ll need:
• business name;
• type of business (e.g., partnership);
• name and SIN of all owners, directors, partners and officers;
• business’s physical address and mailing address;
• description of major business activity.

She can also register her business by phone at 1-800-959-5525 or by filling out Form RC1, “Request for a Business Number” and sending it in to CRA.

Registering by phone is popular with many clients, says Beeny. “It’s instant and also you’ve got someone to talk you through the process.”

Why register for a GST/HST account

• Your client’s business will be automatically assigned a business number when she registers for the GST/HST account.
• Your client must register if taxable revenues exceed $30,000 in a quarter, or over the last four quarters.
• But if there are many start-up expenses and little revenue, she could register to take advantage of the GST/HST input tax credit, says Beeny. A business with $10,000 in eligible expenses would get $1,300 back, depending on the province.

“You can only recover those if […] you’re registered prior to incurring those costs,” Beeny says.

Sources: CRA and Richard Beeny, associate partner, private mid-market practice, EY.

Compiled by Jessica Bruno, content editor of Advisor Group.

If the business should have been charging tax but hasn’t been, there is a risk CRA will consider the sales price of goods and services tax-inclusive.

Tips

• › If your client’s business is located in Quebec, she will have to register for a GST/HST account with Revenue Québec, which will assign a business number. CRA will use that number too.
• › If your client changes her business’s legal structure, such as going from a sole proprietorship to a partnership, she’ll need a new business number.
• › If the business has a payroll account with CRA, she can sign up for direct deposit by filling out Form RC366, Direct Deposit Request.

After registering

• › The CRA may contact your client to confirm or ask for more information.
• › If registering online or by phone, your client should receive a business number immediately. If registering by mail, she’ll get a letter with the number.
• › Your client will be able to access account information and register for other services online through CRA’s My Business Account.

Online Registration Conditions

Your client won’t be able to register online if:

• › she doesn’t have a SIN;
• › she hasn’t filed a Canadian income tax return;
• › she’s registered a similar business;
• › her business is in Quebec and she doesn’t have a GST/HST program account;
• › she has a non-resident business and wants to register for a GST program account;
• › she wants a third program account for the same business;
• › she wants to register a bare trust to hold real estate;
• › she wants to register for a corporate income tax program account for a business incorporated federally with Industry Canada, or provincially in British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario or Saskatchewan.