Uber and Uber Eats GST/HST: What You May Owe If Never Registered

Do I have to register for GST/HST as a ride-sharing or delivery driver?

It depends on the work. If you drove passengers, yes: register from the first paid fare, however little you earn. The small-supplier limit of $30,000 that excuses most sellers does not apply to ride-sharing (CRA: sharing economy; GI-196). The Act reaches these drivers through its "taxi business" definition: passenger trips within a municipality and its environs arranged through an electronic platform (section 123; section 240). If you only delivered food or parcels, you register once taxable sales pass that limit, covered below.

The GST/HST is usually inside the fare, not added on top, so the amount owed for past years is a share of the fares passengers paid (CRA: taxi and ride-sharing drivers). In Ontario that is total fares × 13 ÷ 113; the shortcut for each province is below. Tax that was inside the fares and never sent in is owed, less input tax credits (credits for the GST/HST paid on the costs of earning those fares). Income tax on the same earnings is a separate bill: see unreported income and voluntary disclosure.

A case needs more than a form when it has several years of fares, no returns filed, a CRA letter, delivery work on top of rides, or trips that start in Quebec. Gather first:

• Each platform's yearly earnings and fare summaries, showing gross fares, the platform's fee and the city each trip started in, and the bank deposits they match.
• Receipts for fuel, repairs, cleaning and the car lease.
• Your SIN and any CRA letters.

Which day am I registered from, and what if my first fare was years ago?

The effective date of registration is the day of the first paid fare, and the driver must apply before the 30th day after that day (CRA: register as a rideshare driver; GI-196; section 240). Applying late does not move the date forward.

Online registration cannot go back more than 30 calendar days. For an older first fare, send the CRA a written request with your business number, the date you want and an owner's signature, plus a written statement of the business activity and the date you first drove paying passengers. No other supporting documents are required. The CRA reviews the request and decides (CRA: backdating). If it grants a later date, the Act puts fares before that date on monthly returns of an unregistered person, with no credits (section 245(1); section 238(2); section 169). The platform's trip history or the first deposit can show that date. The CRA dates this requirement from July 1, 2017, so fares before that day may follow the small-supplier test instead (GI-196).

The date sets which periods need returns, which fares carry tax, and which costs earn credits.

Do food and parcel delivery drivers register from the first dollar too?

No. Delivery follows the ordinary small-supplier test: register once taxable sales pass $30,000 over four consecutive calendar quarters (or in a single quarter, under the rule in section 148). The CRA says the requirement to register for, collect and remit GST/HST on gig work depends on the type of work and where the person or business you serve is located (CRA: gig economy). The full test is in When to register for GST/HST.

Driving passengers changes the answer:

Source: CRA: sharing economy; an extension request is made under section 240(3.1), and the CRA decides.

The fare shortcut in the next section comes from the CRA's ride-sharing pages, which do not say it fits delivery sales. If your delivery sales did pass $30,000, the start date comes from the test in the guide linked above.

How much GST/HST is inside my fares, and which rate applies?

Take the tax out of the total fares for each year, using the rate for the province where each ride started (GI-196), at the rate in force on the day of the ride (CRA: GST/HST calculator and rates). The CRA gives a shortcut for each rate:

Source: CRA: taxi and ride-sharing drivers. For rides that start in Quebec, see the Quebec section below: Revenu Québec, not the CRA, administers the GST/HST there.

Two points the CRA's driver pages leave open. They do not say how a platform's fee or tips change the fare total used in the calculation, so ask the platform for each year's summary showing gross fares, its fee, tips and the city each trip started in, and settle which amount belongs in the figure before filing. And a ride-sharing company may agree to carry out some of a driver's GST/HST duties, but the CRA still puts the responsibility on the driver, so check whether the platform collected or remitted anything for you (GI-196; CRA: sharing economy).

Can I claim input tax credits on gas, repairs and my lease for the missed years?

Yes, for costs from the registration effective date, within the time limit, and only for the part used to earn taxable fares.

• Date: a credit needs the tax to become payable in a period when you were a registrant (section 169). No credit is allowed for services supplied before you became a registrant, even if you paid the tax afterward (CRA: input tax credits). Property you already had on the registration date, such as a car, may qualify under separate rules; see claiming GST/HST paid before registering. The effective registration date decides which costs count.
• Time limit: for most registrants the limit is four years: the credit must be claimed by the due date of the return for the last period that ends within that time after the period it first applied to (section 225). For an old year that date can already have passed. When the CRA assesses a period, though, the Act tells it to allow a credit that would have been allowed on a timely return and is refused only because the claim period expired, if the required documents exist (section 296(2)). Whether that reaches your oldest years is a point to confirm before filing them. The CRA's four years limit to assess runs from the later of the return's due date and the day it is filed (section 298), so do not count on time having closed a year with no return. Exceptions exist, so test each year.
• What qualifies: the CRA lists fuel, repairs, maintenance, cleaning, and vehicle leases and purchases (GI-196). Insurance and interest carry no GST/HST, so they carry no credit (CRA: taxi and ride-sharing drivers). A personal car is claimed only for its business share; see driver car costs and records.
• Records: the supplier's invoice or receipt must carry the details the CRA requires; see GST/HST receipt details for input tax credits.

Going forward, the optional Quick Method (drivers with revenue up to $400,000) remits at a rate lower than the one charged and gives up credits on most purchases (CRA: taxi and ride-sharing drivers). It is elected on Form GST74 with a start date at the beginning of a reporting period, and the Act sets the deadline: for an annual filer, the first day of the second fiscal quarter of the year it starts, or a later day the CRA allows on application (section 227(2)). For a past year that deadline has passed, and the CRA's driver pages do not say it can be applied to a past period; see GST/HST Quick Method.

What penalties and interest apply to returns I never filed?

Each unfiled period is its own return, and each one can carry a late-filing penalty and interest. A person who is not registered still has to file a return for a period with net tax to remit (section 238).

Sources: CRA: GST/HST filing penalties; CRA: remit (pay); CRA: interest rates; section 280.

An annual filer whose net tax was $3,000 or more in both the previous and the current year must also pay quarterly instalments, and interest and penalties can apply to a missed one (GI-196; section 237). For an annual filer who is an individual with business income, interest on the year's tax runs from the payment date, April 30, not the filing date (section 228(2)).

The CRA's ride-sharing pages name no separate penalty for failing to register. The charges above come from filing and paying late. No late-filing penalty applies when nothing is owing. The CRA may cancel or waive penalties and interest in some circumstances; waivers and the extra penalty after a demand to file are in Late GST/HST filing penalty.

How do I register now, file the missed returns and pay?

Settle the disclosure question, register, file one return per period, then pay.

1. Settle the disclosure question. If you may apply to the Voluntary Disclosures Program, the application includes the returns and other supporting documents for the periods it covers, and its relief does not reach penalties and interest the CRA has already assessed. Read the disclosure section below before you file anything.
2. Register. Online registration needs a CRA account, the owner's name and SIN as on the T1 return, and your own phone number to confirm identity. The CRA says you cannot get a CRA account if you have never filed a T1 return or have not filed one in the last 2 years (in Alberta and British Columbia, a provincial partner sign-in lets you get one anyway). If you cannot get one, you register by mail on Form RC1; to catch up the personal returns, see catching up on unfiled returns. The CRA says the effective date must be the date of the first fare; if that is more than 30 days back, it asks for the written request described above, and it decides (CRA: register as a rideshare driver).
3. Rebuild each year. List fares by starting province, work out the tax inside them, and list eligible costs with the GST/HST on each. If your records are only bank statements, see rebuilding books from bank statements.
4. File each period, or send the returns with a disclosure application. The CRA assigns ride-sharing drivers an annual reporting period based on estimated revenue; a driver can choose monthly or quarterly (GI-196). An annual filer who is an individual with a December 31 year-end and business income files by June 15 and pays by April 30 (CRA: deadlines). File in your CRA account with each period's start and end dates (CRA: filing in your CRA account). Past-due specifics are in unfiled GST/HST returns.
5. Pay, or ask to pay over time. For a balance you cannot pay at once, see CRA payment arrangements for business debt.
6. Keep records for the usual 6 years, and work out each new period's tax the same way so the debt does not build again.

Can I come forward before the CRA contacts me, and what does it change?

Possibly, if no audit or investigation has started. The CRA's Voluntary Disclosures Program can reduce penalties and interest on GST/HST that was never reported. It never reduces the tax: any tax owing must still be paid (GST/HST Memorandum 16-5-1). Under the current memorandum, all of these must be true:

• Voluntary: no audit or investigation has started against you or a related person on the information disclosed. This is not limited to the CRA.
• Complete: you give all relevant information for all required reporting periods, with supporting documents for the most recent four years. The CRA may ask for older periods.
• Past due with a charge: the information is at least one reporting period past its due date and carries penalties, interest or both.
• Payment: you pay the estimated tax or ask for a payment arrangement, which the CRA does not have to approve.

Relief depends on whether the CRA has already raised the issue:

Source: GST/HST Memorandum 16-5-1; CRA: VDP eligibility. These are the CRA's normal levels, not a promise for any one case.

A qualifying application also brings protection from prosecution, and gross negligence penalties do not apply to the information disclosed (GST/HST Memorandum 16-5-1). Relief does not reach penalties and interest the CRA has already assessed. The application is Form RC199, sent online, by mail or by fax. If a return, estimate or demand already exists, see unfiled GST/HST returns and estimated assessments first; how a disclosure works after a CRA letter is in reviews, audits and voluntary disclosure.

Digital platforms report driver earnings to the CRA (see CRA digital platform reporting). The memorandum counts third-party information as a prompting event but does not say whether a platform report is one, so do not assume an application would be unprompted. A CRA letter that names the problem or sets a deadline generally makes an application prompted, and an audit or investigation already started means it is no longer voluntary. The memorandum does not say whether to register or file before applying, so settle that order before you send anything.

I drive in Quebec: who do I deal with?

Revenu Québec, not the CRA. In Quebec, Revenu Québec administers the GST/HST (CRA: GST/HST for financial institutions), and the CRA's ride-sharing guide tells Quebec drivers who want a GST/HST ruling to call Revenu Québec at 1-800-567-4692 (GI-196). Confirm registration, the effective date, returns and any disclosure with Revenu Québec before using the CRA steps in this guide.

The fare shortcut above assumes only GST or HST is inside the fare. A Quebec fare may also carry Quebec sales tax, and this guide does not cover it, so the shortcut may not give the right answer there. See When to register for GST/HST for QST registration.

Example

These examples are illustrative and use Canadian dollars.

A Toronto driver with two unregistered years

A driver collected C$11,300 in fares in the first calendar year and C$22,600 in the second, all on rides starting in Ontario, and never registered. The HST at 13% inside the fares is fares x 13 / 113: C$1,300 and C$2,600.

Fuel and repairs, all for paid rides, cost C$2,260 and C$4,520 including HST, which gives credits of C$260 and C$520, assuming the CRA accepts the first fare as the registration date and assigns an annual reporting period, and the credits are allowed. The net tax is C$1,040 and C$2,080, C$3,120 in all.

If both returns are filed more than 12 months late, the late-filing penalty reaches its maximum: 1% of the amount owing plus 25% of that for each of 12 months, 4% in all. That is about C$42 and C$83, C$125 in total, plus interest from each April 30 payment date. The tax is most of the bill. A voluntary disclosure, if it fits, can reduce the penalty and interest but not the C$3,120. The income tax on C$33,900 of unreported fares is a separate bill.

A Calgary driver who only delivers

A driver delivers food for an app and earns C$18,000 a year. Delivery follows the small-supplier test, so no registration is required while delivery sales stay at or under C$30,000 over four quarters. If the driver starts carrying passengers, registration is required from the first paid ride. With more than C$12,000 of rides added to the C$18,000 of delivery, combined taxable sales pass C$30,000 and the registration then covers the delivery sales too.

A Montreal driver

A driver with C$20,000 of fares, all on rides starting in Quebec, never registered. Revenu Québec administers the GST/HST there, so the driver confirms the registration date, the returns and any disclosure with it before using the CRA steps. The fare may also carry Quebec sales tax, so the GST shortcut is not applied without checking.

Different for you?

• You have several years of fares, nothing registered, and perhaps a CRA letter: the registration date, the missing returns, the tax inside your fares after credits, and whether coming forward is still open all depend on rebuilt records. See rebuilding books from bank statements and bookkeeping help.
• The CRA already estimated your tax or demanded a return: follow unfiled GST/HST returns and estimated assessments; if the records for those periods are missing, they have to be rebuilt first: see bookkeeping help.
• You already have a GST/HST account for another business: the CRA treats a registered driver as registered for ride-sharing too (GI-196), so the question is missed returns; start with unfiled GST/HST returns and estimated assessments.
• You stopped driving years ago: you may still have returns to file for the years you drove, and an account to close; see closing a GST/HST account.
• The driving ran through a spouse's, relative's or company's account: who has to register depends on who supplied the rides, which the platform statements and deposits help show; bring them to bookkeeping help before registering anyone. A company's directors can also be personally liable for its unremitted GST/HST, and the CRA can assess a director up to 2 years after the person stops being a director (section 323).
• You want the late-filing penalty explained or waived: see Late GST/HST filing penalty.
• You never reported the income itself: use unreported income and voluntary disclosure, and for unfiled personal returns, catching up on unfiled returns.
• A platform has reported your earnings to the CRA: read CRA digital platform reporting.
• You need to know which car costs count: see driver car costs and records.
• You owe more than you can pay at once: see CRA payment arrangements for business debt.
• You drive in Quebec: Revenu Québec administers the GST/HST there; call it before using the CRA steps.