Why would a business want to register for GST/HST before they had to?

Last month we discussed the CRA Business Number, and three of it's most common 'program accounts'.  One of those program accounts was the GST/HST account (the CRA Business Number with "RT0001" at the end). But does a business NEED to register for a GST/HST Account? Does a business WANT to register for a GST/HST Account? 

1. When does a business NEED to register for a GST/HST account?: CRA has a fabulous resource that provides all the specifics, but the TL;DR is: if you are selling anything in Canada that is subject to GST/HST, AND your sales are over $30,000 in one year, you are required to register for GST/HST. (Technically, over $30k in four consecutive quarters, so if your sales from July 1st to June 30th go over $30k, ya gotta register). That's $30k in sales, not the profit. If you are selling across Canada, be aware that Provinces have similar thresholds for Provincial Sales Taxes, though the thresholds vary depending on the province. So, if you are located in Ontario, but selling to BC, you may also need to register for BC PST if you go over their threshold. It's not where you sell FROM, it's where the ownership of the goods is received. But CRA's $30k threshold is when you HAVE to register. A business can elect to register for GST/HST before they reach that threshold. And there are some very good reasons why they would want to!
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2. But does a business WANT to register for GST/HST?: Most sales tax and industry tax that a business collects, they pass ALL of it up to the governing body they are collecting it for. GST/HST is very different though. When you are registered for GST/HST you are special!! Businesses registered for GST/HST do not have to pay any GST/HST on any of their business expenses! That's right! None!! It doesn't happen at the store though. You report to CRA how much GST/HST you paid on business expenses for the period, and they refund it to you! Let's say there's a box of widgets that the business purchases in Ontario for $1,000 + HST. The business paid $1,130. If that business was registered for GST/HST, they'd receive back $130 from CRA, and the widgets only cost them $1,000. If that business was NOT registered for GST/HST, then they don't get back the GST/HST, and the box of widgets now costs them $1,130. You can see why businesses would want to register for GST/HST! BUT, that is only HALF the story! Some business may not want to fire this up before they have to if they're not ready for the responsibility or don't feel it's worth the hassle.
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3. Then why would a business not want to register for GST/HST?: If a business is registered for GST/HST, they are now a TAX COLLECTOR on behalf of the government. This is more work, has the risk of spending money in the bank that isn't yours, and comes with interest and penalties if filed or paid late. It also increases how much your products and services cost to the consumer. Let's say you sell a product you created from widgets. If you are not registered for GST/HST, if you have chosen to charge $3,000 for that product, then you just charge $3k to your customer. But if you are registered for GST/HST, you must charge GST/HST on that product! So, you would charge your customer $3k + GST/HST. In Ontario, you would charge $3,390. You keep the $3k, and you give CRA $390. (If you chose kept your total at $3k, you'd be making less money, as you'd have to 'back out' the GST/HST, so your sale price would only be $2,654 + HST). So being registered for GST/HST increases your price to your customers, AND you now have to collect it, hold on to it for a period of time, and then report it and remit it to CRA. Both how much GST/HST you collect and how much GST/HST you pay on your business expenses are reported and remitted to CRA at the same time. You collected $390 in HST, but you also paid out $130 on the widgets, so, you would tell CRA both of these amounts and only give them $260! ($390 - $130 = $260). You still come out ahead! BUT, it takes discipline to recognize this, keep on top of tracking it, filing it on time etc. It's sneaky!!! If you don't keep your eye on it, and you forget that some of the money in your bank is actually not your money, but CRA's, it can be the cause of many stresses and headaches (and late filing fees, and interest, and collections actions...). Never give CRA more money than you have to! But when a business stays on top of their bookkeeping, and is ready to file and pay each period, being registered for GST/HST is a great benefit! All of those expensive investment purchases at the beginning of the business journey have quite a bit of GST/HST to claim! But if you are a service provider with low overhead and costs, being registered for GST/HST before the $30k threshold may be more hassle than it's worth. Every business is different!