GST/HST for Canadian chimney sweeps: the CRA threshold, Quebec QST, BC PST and Ontario HST

What to take away

The CRA $30,000 small supplier threshold and when it stops applying

The Canada Revenue Agency sets a revenue threshold that decides whether a small chimney sweep business must register for GST/HST. For most sole proprietors, that threshold is $30,000 in taxable supplies over four consecutive calendar quarters. You count revenue from chimney sweeping, inspections, and any other taxable sales, but not GST/HST itself.

The threshold is not measured by calendar year. It follows a rolling four-quarter window, so you check it at the end of every quarter. If your revenue crosses $30,000 in that window, you stop being a small supplier. You then have to register, usually within 30 days of the end of the quarter in which you crossed.

A common mistake is assuming the threshold applies to profit rather than revenue. It does not. If you bill $31,000 in a year but spend $20,000 on a new van and equipment, you are still over the threshold. The CRA looks at gross taxable supplies, not what is left after expenses.

New businesses get a short grace period. In your first year of operation, you are a small supplier if you stay under $30,000 in your first four consecutive calendar quarters. After that, the rolling test applies.

If you are under the threshold, you can still register voluntarily. That can make sense if you buy a lot of equipment and want to claim input tax credits. But voluntary registration means you must charge GST/HST on your invoices and file returns, even in slow seasons.

For a chimney sweep, revenue can swing with the weather. A cold snap in January can push a month well past a quiet July. Because the threshold uses four quarters, one busy heating season can put you over.

Keep a running total in your bookkeeping system so you are not caught by surprise. Good chimney sweep quality control makes that total easy to check each quarter.

Registering for a GST/HST account as a sole proprietor sweep

Registration is done through the CRA. You can register online, by phone, by mail, or through a tax preparer. You will need your business number, which the CRA issues for sole proprietors. If you do not have one, you can get it during the same process.

The CRA's page on GST/HST for businesses covers registration, collection and filing in one place. It is the starting point for any chimney sweep setting up a tax account. See GST/HST for businesses - Canada.ca for the official steps.

Here is the sequence most sweeps follow:

As a sole proprietor, you report business income on your personal T1 return. The CRA's guidance on sole proprietorships and partnerships - Canada.ca explains how to deduct business expenses and report self-employment income. Your GST/HST account is separate from your income tax filing, but the revenue figures must match.

Registration is not the same as incorporation. A sole proprietor can register for GST/HST without forming a company. The account belongs to you personally, even if you trade under a business name.

Once registered, you must show your GST/HST number on invoices over $30. You also need to keep records of every sale and purchase. The CRA expects you to track tax collected separately from your service revenue.

If you stop being a small supplier mid-year, your registration date matters. You generally become a registrant on the first day of the second month after the quarter you crossed the threshold. That gives you time to update your invoices and chimney sweep pricing to include tax.

What counts as taxable supply for chimney sweeping and inspections

Most chimney work is a taxable supply for GST/HST purposes. Sweeping, sweeping plus a visual inspection, creosote removal, cap installation, and chimney repair are all services supplied in Canada. They are taxable at the rate that applies in the province where the work is done.

A WETT inspection is also a taxable supply. WETT Inc. certification is a credential, not a tax status. Whether you are WETT-certified or not, the inspection fee you charge is taxable if you are a GST/HST registrant.

Some sales are zero-rated, meaning GST/HST applies at 0%. Zero-rated supplies include certain exports and some agricultural goods, but they are rare in chimney work. If you sweep a chimney in the United States, that supply may be zero-rated. For work in Canada, assume it is taxable unless you have a specific reason to believe otherwise.

Exempt supplies are different from zero-rated ones. Exempt supplies do not carry GST/HST, and you cannot claim input tax credits for expenses related to them. Most residential chimney sweeping is not exempt. It is a service to the homeowner, and it is taxable.

If you work for a property management company, the supply is still taxable. The fact that you invoice a business rather than a homeowner does not change the tax status. You charge GST/HST based on the province where the chimney is located, not where your office is.

Some sweeps also sell goods, such as chimney caps or stove gaskets. Those are taxable supplies too. If you install the cap as part of a service, the whole invoice is usually one taxable supply. If you sell the cap separately, it is still taxable.

Keep your invoices clear. Show the service, the tax rate, and the tax amount separately. That helps the homeowner and makes your records easier to audit. A proper chimney sweep quote template can be adapted into an invoice that shows tax correctly.

Input tax credits on ladders, vacuums, vehicles and safety gear

Input tax credits (ITCs) let you recover the GST/HST you paid on business purchases. If you buy a ladder for $500 plus $65 HST in Ontario, you can claim the $65 as an ITC. The same applies to vacuums, brushes, rods, safety harnesses, and vehicle expenses.

You can only claim ITCs for purchases used in your commercial activities. If you use your truck half for business and half for personal driving, you claim ITCs only on the business portion. The CRA expects a reasonable method, such as kilometres logged.

Common ITC-eligible items for a chimney sweep:

You cannot claim ITCs on exempt supplies. If you do any exempt work, you have to apportion your ITCs. Most chimney sweeps have no exempt revenue, so this is not usually an issue. But if you also provide a service that is exempt, such as certain residential rent, keep it separate.

ITCs are claimed on your GST/HST return. You need receipts. The CRA does not require you to send receipts with the return, but you must keep them for six years. If you are audited, you will need to show the tax paid.

A vehicle is a common area of confusion. You can claim ITCs on the GST/HST paid for a vehicle used in the business, but there are limits. Passenger vehicles over $30,000 have a maximum ITC. For most work trucks and vans, the full ITC is available if the vehicle is used mainly for business.

Claiming ITCs reduces the tax you remit. If you collect $2,000 in GST/HST and have $600 in ITCs, you send $1,400. If ITCs exceed the tax collected, you get a refund. That can happen in a year when you buy a new vacuum or van.

Quebec: GST plus QST and how it differs from HST provinces

Quebec does not use HST. It has two separate taxes: GST at 5% and Quebec sales tax (QST) at 9.975%. Together they add up to 14.975% on most taxable supplies. As a chimney sweep working in Quebec, you charge both on your invoices.

Revenu Quebec administers QST, while the CRA administers GST. If you are registered for GST, you are usually also registered for QST. The registration threshold for QST is the same $30,000 small supplier threshold. Once you exceed it, you register for both.

Input tax credits work differently in Quebec. For GST, you claim ITCs from the CRA. For QST, you claim input tax refunds (ITRs) from Revenu Quebec. The rules are similar but the forms and the administering body are different.

If you are based in Ontario but do a job in Gatineau, Quebec, you charge GST plus QST on that invoice. The tax rate follows the location of the supply. A sweep based in Montreal who works in Ottawa charges Ontario HST instead.

Quebec has its own building and safety rules. The Régie du bâtiment du Québec (RBQ) licenses contractors in certain fields, and chimney work can fall under those rules. Tax registration is separate from licences and permits, but both matter if you operate in the province.

Keep QST and GST records separately. Revenu Quebec and the CRA can both audit. Your bookkeeping should show which tax was collected on each invoice and which input refunds were claimed.

British Columbia: GST only and the provincial sales tax boundary

British Columbia uses GST at 5% and a separate provincial sales tax (PST) at 7%. Unlike Quebec, BC does not combine them into one harmonized tax. For chimney sweeping services, you charge GST only. PST generally does not apply to services.

The BC PST applies to the sale of certain goods and to some services, but chimney sweeping and inspection are not on the list. That means your invoice to a BC homeowner shows 5% GST and no PST. If you also sell a physical chimney cap, PST may apply to that good.

If you buy goods in BC for your business, you may pay PST at the till. You cannot recover PST as an input tax credit. Only GST is recoverable. That is a real cost difference from Ontario, where HST paid on purchases is fully recoverable.

A BC sweep who buys a $1,000 vacuum pays $50 GST and $70 PST. The GST is claimable as an ITC. The PST is part of the cost of the asset and can be deducted as a business expense over time, but it is not refunded.

WorkSafeBC covers workers' compensation in the province. That is separate from tax, but it is a cost of doing business in BC. The same principle applies in other provinces with their own workers' compensation boards.

If you are registered for GST in BC, you file with the CRA. There is no separate BC provincial return for GST. The PST, where it applies, is administered by the province.

Ontario HST at 13% and what it means for quotes and invoices

Ontario uses HST at 13%, which combines the 5% federal GST with an 8% provincial portion. As a chimney sweep in Ontario, you charge 13% on taxable supplies. The Ontario government explains the tax on its Harmonized Sales Tax | ontario.ca page.

Because HST is one tax, you do not separate federal and provincial portions on your invoice. You show one line for HST at 13%. That is simpler than Quebec, where GST and QST appear separately.

Your invoice must show your business name, the date, the service, the amount, and the HST. If you are registered, you must show your HST number on invoices over $30. For smaller invoices, you still need to charge the tax but the number is not mandatory on the face of the invoice.

Quotes should state whether HST is included or extra. Most sweeps quote before tax and add HST at the invoice stage. That is cleaner for the customer and matches how the CRA expects tax to be shown. If you quote a flat $250 including HST, your revenue is lower than it looks.

Ontario has other rules that affect sweeps. The Technical Standards and Safety Authority (TSSA) regulates fuels and some heating equipment. The Ontario Fire Marshal enforces the Fire Protection and Prevention Act. Neither changes your HST rate, but they affect what work you can legally do.

If you work in multiple provinces, your invoice tax rate changes with the job site. A sweep based in Windsor who crosses into Detroit does not charge HST on the US work. A sweep who works in Cornwall and in nearby Quebec charges HST in Ontario and GST plus QST in Quebec.

Filing your GST/HST return: periods, deadlines and records

Your filing period depends on your revenue. Most small sweeps file annually. If you expect refunds, quarterly filing gets the money back sooner. Monthly filing is required only for large businesses.

The CRA's guide on How to file - File your GST/HST return - Canada.ca walks through the filing options, including online, by phone, and through a tax preparer. You can also use NETFILE-certified software.

Annual filers with a December 31 year end usually have until March 31 to file and pay. Quarterly filers have one month after the quarter ends. Monthly filers have one month after the month ends. Late filing brings interest and penalties.

Records must be kept for six years. That includes invoices, receipts, bank statements, and any tax worksheets. If you use accounting software, back up the data. The CRA can ask for records during an audit, and digital copies are acceptable if they are legible.

CRA forms and publications are available for download from the agency's site. The CRA Forms and publications - Canada.ca page has the GST/HST return, the input tax credit schedules, and payroll forms if you hire help.

A simple worked example shows how the numbers fit. Suppose you are an Ontario sole proprietor with $80,000 in revenue for the year. You charge 13% HST, so you collect $10,400. You paid $3,000 in HST on a new van, vacuums and safety gear.

Your net remittance is $10,400 minus $3,000, or $7,400. You file annually by March 31 and pay the $7,400.

If you had been under the $30,000 threshold and not registered, you would not have charged the $10,400, and you could not have claimed the $3,000. Registration is not optional once you cross the line. Plan for it before the busy season, not after.

Common questions