GST/HST Audit? Protect Your Input Tax Credits and Your Cash Flow
Input tax credit verifications, sales and place-of-supply reviews, rebate audits and full GST/HST audits — Trim Tax prepares your records, defends your credits and deals with the auditor on your behalf.
Why HST audits are common — and costly
The CRA treats GST/HST as money you collect on its behalf, so it reviews claims closely — especially refund returns, first returns after registration, large input tax credit (ITC) claims, and businesses in construction, real estate, trucking, restaurants and online sales.
A GST/HST audit can generally reach back four years, and because the tax is calculated on every sale and every purchase, a small error repeated across four years becomes a large assessment. Disallowed ITCs are the most common result, usually because invoices did not meet the CRA's documentary requirements or purchases were partly personal.
Trim Tax has rebuilt HST records for businesses that had never filed a return and defended ITCs for businesses that had filed every period. We start by reconciling your GST/HST returns to your general ledger and bank statements — the first thing the auditor will do — so we know where the exposure is before the auditor does.
What the CRA reviews in a GST/HST audit
- Sales completeness: reported sales compared with bank deposits, invoices and income tax returns
- Taxable, zero-rated and exempt supplies: whether the right treatment was applied, and whether exports and exempt sales are properly supported
- Place of supply: whether HST was charged at the correct provincial rate on sales to customers outside your province
- ITC documentation: supplier invoices containing the details the CRA requires for the amount of each purchase
- Personal and non-business purchases claimed as ITCs, and the 50% limit on meals and entertainment
- Vehicle ITCs, capital property and changes in use
- Registration timing: whether you should have registered earlier, and HST on sales made before registration
- Rebates: New Housing, New Residential Rental Property, public service body and other rebate claims
- Filing and remittance history: late returns, missed periods and collected tax that was not remitted
ITC documentation — where most HST audits are lost
The CRA's documentary requirements depend on the amount of the purchase. Invoices for purchases of $100 or more must show the supplier's GST/HST registration number and the tax charged; purchases of $500 or more also require your business name, the terms of payment and a description of what was supplied.
Missing registration numbers, invoices addressed to someone else and card slips without supplier details are the most common reasons ITCs are denied. Where invoices are incomplete, we request replacements from suppliers, verify registration numbers through the CRA's GST/HST registry, and present other support where the CRA's policies allow it.
How we handle your HST audit
- Authorization through My Business Account or form AUT-01 for your GST/HST program account
- Pre-audit reconciliation of every return in the audit period to the general ledger and bank statements
- ITC file: invoices organised by period, registration numbers verified and gaps filled
- Information requests answered completely, with explanations of unusual items before the auditor has to ask
- Meetings with the auditor handled by us, in person or virtually
- Proposal response: a written reply to the auditor's proposal letter before the assessment is issued
- Notice of Objection filed within 90 days of the assessment where adjustments are wrong
- Relief: penalty and interest relief requests where justified, and a Voluntary Disclosure for other periods or accounts not under review, where eligible
- Clean-up afterwards: HST coding, an invoice checklist and a filing calendar so the next review is uneventful
Who we help
Construction and renovation contractors with progress billings and subcontractors
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Builders and investors facing New Housing or New Residential Rental Property rebate audits
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Restaurants, retailers and other cash-based businesses
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Trucking and logistics companies
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eCommerce and multi-province sellers
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Businesses whose first refund return has been held for review
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Directors assessed personally for their corporation's unremitted HST
Book a consultationWhy choose Trim Tax for an HST audit
- Books and HST under one roof: we reconcile before the auditor does, so there are no surprises.
- Deep ITC experience — we know what the CRA accepts and how to repair incomplete invoices.
- Real estate HST expertise for rebate, self-supply and assignment-sale audits.
- Proposal letters answered in writing before they become assessments.
- Flat fees by audit phase, quoted after a free review.
- Prevention built in: an HST process that holds up the next time.
Frequently asked questions
HST audit letter on your desk?
Book a free, confidential review with a Trim Tax CPA — call 647 243-5076 or email info@trimtax.ca.
Disclaimer: Trim Tax is an independent accounting firm and is not affiliated with the Canada Revenue Agency. Results depend on your individual facts and CRA criteria; no outcome is guaranteed.
