What is the Voluntary Disclosures Program and can it help me fix past HST mistakes?

The Voluntary Disclosures Program (VDP) is a CRA program that allows taxpayers to come forward and correct unreported or under-reported taxes — including HST — before the CRA discovers the error. If your disclosure qualifies, the CRA generally waives civil penalties and may reduce interest, making it significantly less costly to fix past mistakes than waiting for an audit.

To qualify for the VDP, your disclosure must be: voluntary (an unprompted application - one the CRA hasn't yet contacted you about - gets the most relief, though a prompted application made after limited CRA contact, like an education letter, but before an audit or other enforcement action, can still qualify for reduced relief), complete (you must disclose all related non-compliance, not just part of it), and involve information that is at least one year overdue (there is no benefit for correcting errors within the normal filing window).

The VDP has two streams: unprompted applications (made before the CRA has contacted you about the issue), which can receive full penalty relief and 75% interest relief, and prompted applications (made after some CRA contact, like an education letter, but before enforcement action such as an audit), which can still receive up to full penalty relief and 25% interest relief. Applying through the VDP can be a smart move if you realize you have been collecting but not remitting HST, underreporting sales, or failing to file returns.