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paulthemaker
November 19, 2020
Question

ITC on existing inventory at time of GST registration

  • November 19, 2020
  • 1 reply
  • 0 views

In May I registered for a GST account with CRA as I met the threshold for the first time. I believe I can claim ITC for my existing inventory of saleable items at the time of registration. All of my inventory is wooden items I have made. Obviously I know the retail price I put on those items, but I do not know the cost of materials used to make them. If allowed, how do I claim ITC for these?

1 reply

L
LauraAB
November 19, 2020

Hello paulthemaker,

 

Meeting new thresholds as a business is an exciting time! I can appreciate needing to account for certain changes in those instances, which can mean figuring out new steps for managing your books. It sounds like you have an interesting business, and I want to make sure you're able to handle these changes with your bookkeeping and record it accurately in QuickBooks Online.

 

When you use QuickBooks Online and have the sales tax module configured through the Taxes tab, the program does the work of calculating sales taxes against your income and expenses when you assign the appropriate sales tax code to them. Moving forward, the program should show you these calculations, including any ITCs in sales tax reports found in the Reports tab and when you're ready to file sales tax and go through that process.

 

To determine how to best record the ITCs for your existing inventory, especially since you're not sure of the costing, I recommend connecting with an accountant. Accountants have the training to handle these kinds of situations to make sure that these figures are entered correctly for your remittances to avoid issues later.

 

QuickBooks Online is designed to keep things as simple as possible, and that's no different for working with an accountant. The My Accountant tab exists just for this purpose, giving you the opportunity to invite your accountant on as a user to your QuickBooks so they can work directly in the program with you. The tab also has a Find a pro to help button, which brings you to our database of QuickBooks-certified accountants who can lend a hand.

 

All the best to you with this!

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