- A business below the small-supplier threshold can choose to register for an HST number anyway.
- The main advantage is recovering HST you're already paying.
- The most direct downside is that you now have to charge HST on top of your prices.
Not every Ontario business has to register for HST. If your revenue is under the small-supplier threshold, registration is optional — which means you get to make a choice most established businesses don't have. The question is whether voluntary HST registration makes sense for your business before you're required to register.
This article lays out the general trade-offs. The right answer depends heavily on who your customers are and how much you're spending on taxable business inputs, so treat this as a starting point for a conversation with your accountant, not a final answer.
What Voluntary Registration Actually Means
A business below the small-supplier threshold can choose to register for an HST number anyway. Once registered — voluntarily or otherwise — the business must charge HST on its taxable sales, file regular HST returns, and remit the tax collected to CRA. In exchange, it can claim input tax credits (ITCs), recovering the HST it pays on its own business purchases and expenses.
The Case For Registering Early
The main advantage is recovering HST you're already paying. If your business has meaningful expenses — equipment, supplies, professional fees, rent — you're paying HST on those purchases regardless of whether you're registered. Without registration, that HST is simply a cost you absorb. With registration, you can generally claim it back as an input tax credit, which can meaningfully improve cash flow for a business investing heavily in its early years.
Voluntary registration can also make a new business look more established to business customers, some of whom expect to deal with HST-registered suppliers as a matter of course.
The Case Against Registering Early
The most direct downside is that you now have to charge HST on top of your prices. If your customers are mostly individual consumers who can't claim the tax back themselves, adding HST — 13% in Ontario, as of mid-2026 — to your price can make you less competitive against a similar small-supplier business that isn't charging HST at all. This matters much less if your customers are HST-registered businesses that can claim their own input tax credits, since the HST you charge is effectively neutral to them.
Registration also brings ongoing compliance: regular HST returns, recordkeeping, and remittances, even in periods where your revenue is modest. That paperwork burden is real and shouldn't be underestimated for a very small or part-time operation.
Who Tends to Benefit Most From Registering Early
- Businesses with significant upfront costs — equipment, inventory, renovations — where recovering HST on purchases meaningfully offsets the cost of charging it on sales.
- Businesses that sell mainly to other HST-registered businesses, where charging HST doesn't make the business less competitive.
- Businesses that expect to cross the small-supplier threshold soon anyway, where registering early avoids a scramble later.
Who Should Probably Wait
- Businesses selling directly to individual consumers who are price-sensitive and can't recover the HST themselves.
- Very small or part-time operations where the compliance burden of filing regular returns outweighs the benefit of reclaiming modest input tax credits.
- Businesses still testing whether their revenue will be sustained at all — registering, then needing to unwind it, adds unnecessary complexity.
Weighing the Decision: A Checklist
- [ ] Estimate your annual HST-taxable business expenses — the bigger this number, the more valuable the input tax credits become.
- [ ] Identify who your customers are — consumers or HST-registered businesses — and how price-sensitive they are.
- [ ] Consider how close you are to crossing the small-supplier threshold anyway.
- [ ] Be honest about your capacity to handle regular HST filings and recordkeeping.
- [ ] Talk to an accountant about the actual numbers for your business before deciding either way.
Frequently asked questions
Can I cancel voluntary HST registration later if it doesn't work out?
Generally yes, though cancelling has its own rules and process, covered in more detail in a companion article on cancelling HST registration. It isn't necessarily a same-day decision to reverse.
Does voluntary registration change how I invoice customers?
Yes — once registered, you're required to charge and clearly show HST on your invoices for taxable supplies, and to keep the records needed to support your returns and any input tax credits claimed.
If most of my customers are outside Ontario, does voluntary registration still make sense?
It can, depending on where your customers are and how the supply is taxed, but cross-border and interprovincial sales add complexity to the analysis. This is a good scenario to review with an accountant familiar with your specific customer base.
Will registering voluntarily trigger a CRA audit?
Registering for HST, on its own, does not flag a business for audit. Audits are generally driven by other risk factors, not simply by the decision to register.
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