One of the biggest fears I hear from business owners in Ottawa is: “What if the CRA audits me?”
The truth is, audits don’t always come out of nowhere—they often start with small mistakes in your GST/HST filings. As a bookkeeper, I’ve seen the same errors repeated again and again, and while they may seem minor, they can trigger penalties, interest charges, or even a full audit.
If you want to stay compliant (and sleep better at night), here are the most common GST/HST filing mistakes Ottawa businesses make—and how to avoid them.
1. Charging the Wrong Rate
One of the simplest but most costly mistakes is charging the wrong tax rate. In Ontario, HST is 13%, but businesses that also sell to other provinces sometimes forget that rates vary across Canada. If you apply the wrong rate on invoices, it can lead to misreported filings and CRA scrutiny.
2. Missing Input Tax Credits (ITCs)
Did you know that many of your business expenses allow you to claim back the HST you’ve already paid? These are called Input Tax Credits (ITCs).
The mistake? Business owners either forget to claim them altogether or claim ineligible expenses (like personal items). Both errors can create problems: one leaves money on the table, the other invites a CRA reassessment.
3. Filing Late or Missing Deadlines
I’ve seen Ottawa businesses with strong revenue still end up paying unnecessary penalties because they missed their GST/HST filing deadlines. Even being a few days late can mean extra charges, which only grow if the CRA thinks it’s a pattern.
4. Not Keeping Proper Records
The CRA doesn’t just take your word for it. If you claim ITCs or collect HST, you need to have receipts, invoices, and proper bookkeeping to back it up. A shoebox full of receipts (or worse, no receipts at all) won’t cut it during an audit.
5. Reporting the Wrong Filing Period
Some businesses in Ottawa are required to file GST/HST quarterly, others annually, depending on revenue. I’ve seen owners file for the wrong period or mix up reporting windows, leading to mismatched numbers and CRA follow-up.
6. Mixing Personal & Business Expenses
If you claim HST back on a dinner that was really personal, or on supplies that weren’t for the business, the CRA can—and will—deny those claims. Worse, repeated mistakes like this can raise red flags that increase audit risk.
Why These Mistakes Trigger Audits
The CRA looks for inconsistencies. If your HST filings don’t match your revenue, your ITC claims seem too high, or your filing pattern looks irregular, it increases the chance of being audited. Even honest mistakes can set off alarms.
The good news? With clean bookkeeping, accurate records, and timely filings, you can drastically reduce your audit risk.
Final Thoughts
Running a business in Ottawa is hard enough—you don’t need the extra stress of worrying about CRA penalties or an audit. The key is being proactive, not reactive.
👉 That’s why I offer Quarterly Tax Reminder Sign-Ups. You’ll get timely reminders and bookkeeping support to make sure your HST and GST filings are always accurate and on time.
