Charging HST for self-employed people. In my case, it's not possible to charge HST. Any advice is much appreciated.

[Ottawa_613]

Hi, I work and provide food delivery services as an "Independent Contractor" to "Skip the Dishes" and make around $1000 per week and receive the money in my bank account weekly. 

It seems that I will make over 30K this year and I know that as a self-employed, I am required to charge HST if I hit $30,000 but the issue is this company does not provide a way to charge them HST. 

They pay delivery fee + tips for every trips and they direct deposit the money weekly. Can you please tell me what are my options in this case? And what happens if I make over $30,000? Any help is much appreciated.

[TurboTaxKim · Accepted solution]

As a delivery driver for "Skip the Dishes", you are considered to be a self-employed "Courier". (Industry Code 492110)

• Several carriers may take part in the supply of a freight transportation service during the course of a continuous freight movement from the shipper (the restaurant), to the consignee (the customer), but only one carrier (Skip the Dishes), invoices the customer. This process is called interlining.

Only the invoicing carrier (Skip the Dishes) who settles the freight bill directly with the customer is responsible for charging and collecting any applicable GST/HST.

As a Courier you are not required to register for GST/HST as you are not charging or collecting the GST/HST,  but you may benefit from registering for the GST/HST since you would be able to claim input tax credits for the GST/HST you pay or owe on expenses related to your interline services.

The following CRA link explains further. In particular the section - Find out if you need to register for GST/HST account, Part 2. 

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/specific-s...

[Ottawa_613]

Thanks for taking time and answering my question.

I also have two more questions:

1. If I register for GST/HST number, I will need to report my tax collection every year or as chosen. So in my case, how should I enter the collected tax?  $0? And is it OK to claim ITC's in the same form with $0 taxes collected? How does this work?

2. If I make over $30,000 in a year, will CRA ask me to pay for the HST even I didn't collect the tax?

Thanks again!

[TurboTaxKim]

Good questions!!
You still have to report the income you make, it is just considered to be "Zero Rated". You declare the total income you earned and "zero" for the amount charged or collected.
As this falls under the "interlining" rules for courier drivers and you are not the one collecting the tax, you are not required to pay the GST/HST.
From the above link:

Courier services

The interlining rules also apply to courier services. For example, when a freight company contracts with a courier to pick up or deliver goods to the freight company, the courier bills the freight company for the service and, in turn, the freight company bills either the shipper or the consignee. The courier does not charge the GST/HST on its service because it is an interlining carrier and it is not the invoicing carrier.

When a courier company contracts with a person to deliver goods, the courier company issues an invoice to its customer and is responsible for charging and collecting the GST/HST. Persons who are under contract with the courier company to make deliveries and who do not invoice the customer directly can zero-rate their services to the courier company because they are interlining carriers.

As a courier providing only interline freight transportation services, you do not collect the GST/HST from the carrier for those services. In this case, even if you are a small supplier, you would benefit from registering for the GST/HST since you would be able to claim input tax credits for the GST/HST you pay or owe on expenses related to your interline services.

[Ottawa_613]

Thanks a million!! I really appreciate your help!

I asked an accountant and also called CRA business help but they had no idea what they were talking about!

Thanks again!

[Courier_Tax]

Hi there,

I’m sorry, but the answer you received from Kim is completely incorrect. Couriers that are making over 30k per year are suppose to register for a GST number and Collect GST/HST in your situation.

Skip The Dishes, or any similar companies are NOT freight carriers, therefore interlining is not factored here. Skip the dishes is a marketing company, and their delivery charge is no different than a delivery charge that a company like The Brick would attach to the sale of a bed, if the person wanted to get it delivered. Whichever courier company has a contact with the brick to delivery that bed would ABSOLUTELY be required to charge GST to The Brick, as they would be responsible to pay the highest taxable amount charged for the courier fees.. you follow?

A situation where interlining would be considered, and the GST would be zero rated would be if a registered freight carrier (IE FedEx, Purolator or UPS) would be if the courier company that was billing The Brick for their courier services hired a sub-contractor to deliver it for them.. IE..

The Brick has a contact with FedEx to deliver beds for $100.00 + $5.00 GST (Total $105.00) Then hires Bobs Courier to deliver the bed for $80.00. Then Bob’s courier would not be required to charge the $4.00 GST because the brick already collected the $5.00.

Given that companies like Skip only charge their customers up to $5.00 for delivery there is absolutely No Way they could get away with zero rating the courier fees that they are paying out that are much more than that usually.

Hope this helps! 

[TurboTaxKim]

@Courier_Tax  Thank you for this information. It makes sense that a Skip The Dishes driver does not meet the Interlining Rules as they are not actually delivering "freight". However, my reply was based on the Skip driver being considered a courier and falling under the definition found in this CRA documentation. Canada Revenue Agency - Definitions for GST/HST 

"Freight transportation service

Freight transportation service means the service of transporting goods. It includes postal and courier services, as well as incidental property or services supplied by a carrier, such as warehouse, packing, and loading services, whether or not a separate charge is made for them. These incidental charges may be subject to GST/HST, or zero-rated depending on the GST/HST status of the basic freight charge. A freight transportation service does not include a service provided by the supplier of a passenger transportation service of transporting an individual's baggage in connection with the passenger transportation service."

If they are not considered to be Zero-Rated and need to be collecting and remitting GST/HST, (rather than just claiming the ITCs), this needs to be addressed by CRA and other information sources for these drivers, which clearly state "they do not need to".

I look forward to more information and clarification so we are able to provide the correct information for the many individuals who are driving for these delivery services. 😊

Here are a few links that come up with the Google search "skip the dishes gst registrant requirements".

https://commercialdriverhq.com/skip-the-dishes-courier-driver/

https://www.hrblock.ca/wp-content/uploads/2017/12/Skip-Independant-Contractor-Reporting-Guide-02_20....

[swalker332003]

Hello, I am just curious then what I should be putting away for tax time if my income will be far less than 30,000 working for instacart? 

[Courier_Tax]

If you are working as a self employed courier for Instacart (Maple Bear Inc.), you can deduct all of your expenses related to your work (Auto Expenses, Meals, Accounting Software). If you are already making less than $30,000.00 before deductions, you will likely not pay too much in income taxes! Make sure to keep all of your receipts, as well as keep track of your KM’s you use for work!

If you are not making $30,000.00, and you are not already a GST registrant, you are not required to collect GST. However, it is more beneficial to be a GST registrant so you can claim back all the GST you spend on business related expenses (ITC’s).

If you are a GST registrant, you can provide your number to Instacart (Maple Bear Inc.) and they will automatically add the GST into your courier fees.

[Dieth22]

Hi I am also with instacart... I registered like 6 months ago for HST and gave my hst number to instacart  but they still say they are verifying it... it's been over 6 months and I have contacted their support to no avail... am I still liable for paying tax on what I earn?

I paid from April-June even though instacart didnt pay me but I cant really afford to pay from July-Sept with instacart not paying me

. What do I do in this case where I've given them my hst number but they dont pay me and there's no way to get in contact with someone to resolve my issue?