GST/Sole Proprietor question

[Swift]

My step-daughter got a two week gig as a make-up/hair stylist assistant for a photoshoot. They've asked her to provide a GST # in order to get paid.

The relative who got her the gig told her she will need to set up as a sole proprietor for this. Before she goes down this road, is all of this correct? I have no idea about any of this stuff, but it seems like a lot of a work for a couple of weeks work.

A quick google search suggests that only small businesses earning over $30,000 a year need a GST #.

Any advice/help is much appreciated.

[belsarius]

Originally Posted by Cameron Swift

My step-daughter got a two week gig as a make-up/hair stylist assistant for a photoshoot. They've asked her to provide a GST # in order to get paid.

The relative who got her the gig told her she will need to set up as a sole proprietor for this. Before she goes down this road, is all of this correct? I have no idea about any of this stuff, but it seems like a lot of a work for a couple of weeks work.

A quick google search suggests that only small businesses earning over $30,000 a year need a GST #.

Any advice/help is much appreciated.

They might require her to set up as a sole proprietorship in order to pay her (need a company name) and that is about $115 I think at an Alberta registry. For GST, the google is correct and she won't need a number until she is making $30,000/year.

[Regular_John]

It's been a few years since I freelanced, but there's essentially two sides to this.

1) The CRA requirements for collecting GST (which is the $30k number other's have mentioned)
2) This specific company's requirements for contract/sole-proprietors

For the first one, getting a GST/Business number from the CRA is easy (or at least was when I did it) through their website. I don't recall paying for it, a colleague of mine got one last year and it took less than 48 hours if I recall.

For the second one, confirm with the person/group doing the photoshoot if there's anyway around requiring a GST number as she doesn't anticipate crossing the $30k threshold this year, or collecting GST on this transaction. But she's happy to provide them with an invoice for her services.

Some groups will 100% not work with a sole-proprietor that does not have a business number and/or GST number. Others can be more flexible.

When it comes to sole-proprietors there's a bit of confusion out there, in one instance I had invoiced a company (with my GST number and all), they paid the invoice. Then at tax season next year I got a nasty phone call from their payroll department claiming I had to provide them with my SIN number so they could issue me a T4... despite having not had any deductions made from them and having never been on the payroll.

If it helps, call the CRA help line and ask, I've found them to be quite helpful with questions of this nature.

[northcrunk]

When setting up a GST account make sure they have your legal description correct. If they mess up it takes them 3 months to fix the mistake.

[mrkajz44]

Jaydorn has some solid advice. Personally, I'd avoid getting a business/GST number at this point given its a two week job only. That business number is permanent and will follow around the business. Not that that is necessarily a bad thing, but getting a permanent number for 2 weeks seems excessive.

I think the best way to convince the company she doesn't need a GST number is to invoice them with GST clearly being shown as zero. So the invoice looks like this:

Service: $100
GST: $0
Total: $100

That way it is clear to both parties that there is no GST to be charged and as such a GST number is not required. That covers the company as they will have the invoice to prove they shouldn't have paid GST based on the invoice if the CRA ever comes knocking (which is extremely unlikely). If there was no GST line on the invoice showing zero it become more ambiguous, which I'm guessing is what the company wants to avoid.

[Locke]

Some good advice in here.

Honestly, the company probably just wants her to have the GST number because they dont want to have to pick and choose who they pay GST to.

This is about simplifying their own payroll and GST remittances.

[Swift]

Thanks guys. She spoke to the company and they've reiterated that the GST # is required, so it probably is what Locke has suggested.