Voluntary Registration of GST/HST for Canadian Businesses: Pros & Cons

If you run a small business, startup, or side-gig in Canada, you’ve likely heard the threshold for mandatory GST/HST registration: $30,000 in taxable revenue over four consecutive calendar quarters. 

But what many business owners don’t realise is that you can voluntarily register for GST/HST even while you are still under that threshold. 

At FANS Accounting Services, we help Canadian businesses; from entrepreneurs and freelancers to agricultural businesses, evaluate whether voluntary registration makes sense, and if so, how to maximise its benefits while managing obligations.

In this guide we’ll cover:

  • What voluntary registration means
  • The pros of registering early
  • The cons / risks you should consider
  • When it makes strategic sense
  • Practical next-steps and how FANS can support you

What is Voluntary GST/HST Registration?

Under the Canada Revenue Agency (CRA) rules, businesses whose taxable supplies exceed the small-supplier threshold must register for a GST/HST account. 

However — even if your business has not yet reached the threshold, you can apply to register voluntarily. 

Once registered, you must:

  1. Charge GST/HST on your taxable supplies
  2. File and remit GST/HST returns on a regular basis
  3. Maintain proper records and meet reporting obligations
  4. Stay registered for at least 1 year before you can cancel (if you voluntarily registered) in most cases. 

Pros of Voluntary Registration

1. Input Tax Credits (ITCs) Eligibility

Once registered, you can claim input tax credits — which means you can recover GST/HST paid on purchases and expenses used in your commercial activities. 

This can be especially favourable if your business incurs significant expenses (equipment, software, vehicles, etc.) early on.

2. Business Growth & Credibility

Being GST/HST-registered can signal to suppliers, partners, and clients that you operate with greater professionalism and financial accountability. Some clients may prefer or require working with registrants. 

Early registration positions you for growth without the scramble when you cross the threshold.

3. Timing Control

Voluntary registration means you choose the “effective date” of registration (often the date you apply or up to 30 days before) rather than wait until you exceed the threshold unexpectedly. 

That gives you planning flexibility for collections, bookkeeping, and tax periods.

Cons of Voluntary Registration

1. You Must Charge GST/HST

Once registered, you must charge GST/HST on your taxable supplies even if your clients are not registered. If your clients are consumers, the tax may increase their cost, which could hurt competitiveness—especially for small-scale businesses.

2. Increased Compliance Obligations

Being a registrant means you have to file GST/HST returns periodically (monthly, quarterly or annually), maintain detailed records, and ensure you remit correctly. Failure to comply brings penalties and interest. 

For some small or low-volume operations, this administrative burden might outweigh benefits.

3. Possibility of Paying Unrecoverable Tax

If most of your clients are “consumers” (not registrants), the GST/HST you collect becomes an extra cost to them — this may reduce demand or require you to absorb the tax yourself.

Also, you must stay registered for at least one year before cancelling, limiting your flexibility. 

When Does Voluntary Registration Make Strategic Sense?

Consider voluntary registration if you:

  • Have large upfront capital purchases (equipment, software, vehicles) where claiming ITCs significantly reduces costs.
  • Anticipate crossing the $30,000 threshold in the near future and want to manage the date proactively.
  • Supply mostly to other registrants (B2B) who expect GST/HST invoices and will claim ITCs themselves.
  • Want to boost your business credibility and growth positioning.

On the other hand, it may not make sense if you:

  • Serve mostly consumer clients (who’re not GST/HST registrants) and cannot pass the tax cost on.
  • Operate with minimal expenses and therefore have little to claim via ITCs.
  • Are not prepared for additional bookkeeping and compliance demands.

Practical Steps to Voluntary Registration

  • 1. Assess your annual taxable revenue and forecast growth — if you’re close to the threshold, it may pay to register early.
  • 2. Evaluate expenses and purchases — high startup or capital fare may justify registration.
  • 3. Decide your reporting frequency — monthly, quarterly or annual.
  • 4. Update invoicing and systems —post-registration, you must include your GST/HST number on invoices and track tax collected/paid. 
  • 5. Monitor deadlines & remittances — use software or engage professionals to stay compliant.
  • 6. Review annually — your business may outgrow your current reporting or be subject to different rules.

How FANS Accounting Services Can Help

At FANS Accounting Services, we provide:

  • Clear assessment of whether voluntary registration suits your business model.
  • Setup of your GST/HST account and integration into bookkeeping systems.
  • Ongoing monitoring of taxable revenue, ITCs, and compliance.
  • Invoicing guidance, reporting frequency advice, and full return filing support.
  • Compliance checkups to avoid penalties and maximise benefits.

Book a Free GST/HST Strategy Call today and let us help you decide if early registration is the right move for your business.

Conclusion

Voluntary GST/HST registration offers real benefits, particularly if your business has high capital purchases, growth potential, or B2B clients. But it comes with responsibilities: charging tax, filing returns, and staying compliant.

With the right advice and systems in place, registration can be a strategic advantage. FANS Accounting Services is here to guide you every step of the way.

Disclaimer:

This blog is provided for general information only and should not be interpreted as tax, legal, or accounting advice. Each business situation is unique. Readers should consult a qualified tax professional before making decisions based on this information.

For additional details, you can visit the official CRA page on GST/HST registration:
https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses.html

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