- A business can typically apply to cancel its HST registration when it has stopped making taxable supplies altogether — for example, the business has closed, been sold, or changed…
- A business that is still making taxable supplies above the small-supplier threshold cannot simply cancel its registration to stop charging HST — the underlying obligation to be…
- Confirm you actually meet the conditions to cancel — that your business has stopped taxable activity, or that any minimum registration period for a voluntary registrant has passed.
Businesses close, scale down, or shift into activities that no longer require charging HST. When that happens, simply ignoring an HST number isn't an option — CRA still expects registered businesses to file returns until the registration is formally cancelled. This article walks through cancelling HST registration in Ontario: when it's available, the general process, and what to watch for.
Because the specific eligibility conditions and procedural requirements can change, confirm the current rules directly with CRA or an accountant before acting — this is a general overview, not a step-by-step CRA form guide.
When Cancellation Is Generally an Option
A business can typically apply to cancel its HST registration when it has stopped making taxable supplies altogether — for example, the business has closed, been sold, or changed entirely into activities that are exempt from GST/HST. A business that registered voluntarily while under the small-supplier threshold may also be able to cancel and revert to small-supplier status, though voluntary registrants are often expected to remain registered for some minimum period before doing so — check the current requirement, since assuming a specific length of time without confirming it can lead to a rejected application.
When Cancellation Is Generally Not an Option
A business that is still making taxable supplies above the small-supplier threshold cannot simply cancel its registration to stop charging HST — the underlying obligation to be registered continues as long as the business's activity meets the test. Cancelling registration doesn't erase past obligations either: returns for periods while you were registered still need to be filed, and any HST already collected still needs to be remitted.
The General Steps to Cancel
- Confirm you actually meet the conditions to cancel — that your business has stopped taxable activity, or that any minimum registration period for a voluntary registrant has passed.
- Apply to CRA to cancel the registration, providing the effective date you want cancellation to take effect.
- File any outstanding HST returns up to the cancellation date — cancellation doesn't excuse filings that were already due.
- Address any HST implications of winding down the business itself, including inventory and capital assets still on hand (see below).
- Keep your business records for the period CRA generally requires, even after the number is cancelled, in case of a later review.
What Happens to Input Tax Credits and Inventory
Cancelling registration isn't just a paperwork formality — it can have tax consequences for what the business still owns. In general terms, a business that deregisters may be treated as having disposed of certain business assets (inventory, equipment) it still holds, which can trigger an HST liability on the deemed value of those assets at the time of cancellation. This is an area where the specific mechanics matter a great deal, and getting it wrong can mean an unpleasant surprise on a final return. An accountant should walk through what the business still holds before the cancellation date is finalized.
Common Mistakes When Cancelling
- Assuming registration can simply lapse if you stop filing — CRA doesn't treat non-filing as cancellation, and penalties and interest can accumulate on outstanding returns regardless.
- Cancelling before confirming you're actually eligible to (for example, while still above the threshold, or before a voluntary registrant's minimum period has passed).
- Overlooking the deemed-disposition treatment of inventory and equipment still on hand at cancellation.
- Failing to keep records after cancellation, in case CRA later reviews the periods you were registered.
After Cancellation: What Changes
Once cancellation takes effect, the business generally stops charging HST on its sales and can no longer claim input tax credits on its purchases going forward — the trade-off is the same one made in reverse when the business first registered. If the business ever resumes taxable activity above the small-supplier threshold, it will need to register again at that point.
Frequently asked questions
Can I cancel my HST number the same day I close my business?
Not automatically — you generally need to apply to CRA and specify an effective date, and any outstanding returns still need to be filed. Closing the business's operations and formally cancelling the registration are two separate steps.
What if I sell my business — does the buyer inherit my HST number?
No. An HST registration is tied to the specific registrant, not the business's brand or assets. A buyer generally needs to register in their own right if they will be making taxable supplies, and there are specific rules that can apply to the sale transaction itself.
Do I still need to keep records after my HST number is cancelled?
Yes. CRA generally expects registrants to retain business records for a period of time even after deregistering, in case of a later review of the periods when the business was registered.
Is there a penalty for cancelling too early?
If you cancel while you were still required to be registered, the practical consequence is usually that you remain liable to have collected and remitted HST during that period regardless of the cancellation — not a separate standalone penalty for the cancellation itself. Confirm your actual eligibility before applying.
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