What is the HST Quick Method and should I use it as a small Ontario business?

The HST Quick Method is an optional simplified remittance option available to small businesses with annual taxable revenues below a threshold set by the CRA. Instead of tracking and remitting the difference between HST collected and ITCs claimed, you remit a flat percentage of your total revenue (including HST) to the CRA. The applicable rate depends on your industry type — service businesses and goods-selling businesses have different rates.

The Quick Method reduces paperwork because you don't need to itemize your ITCs. If your business has relatively few HST-eligible business expenses, the Quick Method can actually result in paying less HST than the regular method, because the prescribed remittance rate is set lower than the full HST rate.

However, if you have significant business purchases with HST (capital equipment, materials), the regular method may be more beneficial because you get full ITCs. You must formally elect to use the Quick Method, and the election applies to your fiscal year. Businesses cannot use the Quick Method if they provide certain financial, legal, or accounting services. A tax professional can model both scenarios to determine which is more advantageous for your specific situation.