What happens if I file my HST return late in Ontario, or can't pay what I owe?

Late-filing an HST return carries an automatic CRA penalty: generally 1% of the amount owing, plus 0.25% of that amount for each full month the return stays outstanding, up to a maximum of 12 months, calculated from the due date. Daily-compounded interest also runs on any unpaid balance, at the CRA's prescribed rate, from the due date until you pay in full — interest applies whether or not the late-filing penalty also applies.

Filing late while in a refund position typically avoids the penalty, since it is calculated on amounts owing, but you should still file promptly. A backlog of unfiled returns is itself a compliance problem the CRA can act on, including estimating and assessing your liability without your input.

If you cannot pay what you owe, file the return anyway and on time. The late-filing penalty is triggered by not filing, separately from not paying, so filing on time stops the larger penalty from applying even if payment follows later. The CRA can also negotiate a payment arrangement once an amount is assessed, and being proactive before enforcement action starts, such as a requirement to pay issued against your bank account, generally produces a better outcome.

If HST arrears are becoming a pattern, get advice — repeated late filing and unpaid HST can also expose a corporation's directors to personal liability.