XBert Type: Standard
Accounting Software: Xero, MYOB, QuickBooks
Country Restriction: CA only
Risk Type: Tax Risk
Business Function: Purchases
Overview
The "Payment to supplier not registered for GST/HST" XBert checks for authorised payments or bank transactions made to suppliers who are no longer registered for GST/HST with the CRA. If GST/HST has been paid to an unregistered business, this amount cannot be claimed back on your GST/HST return, which may result in unrecoverable tax and audit risks.
What it does
This XBert reviews supplier contact records to determine if a valid GST/HST registration is recorded. It then checks all payments and bank transactions made to these suppliers in the past 12 months. If any suppliers are identified as not GST/HST registered and have received payments where GST/HST was included, an alert is triggered.
The alert is based on a minimum threshold of $10 total GST/HST activity and will only show up to the top transactions to help focus attention on the most critical issues.
How it works
XBert performs the following checks:
Identifies active supplier contacts without an active GST/HST registration
Scans authorised bill payments and bank "spend" transactions over the last year
Sums total payments and GST/HST paid to these contacts
Flags contacts where $10 or more in GST/HST has been paid but cannot be claimed due to invalid registration
Example/Use Case
Your business has been purchasing regularly from a supplier who had been GST/HST registered for many years. Unbeknownst to you, they recently ceased registration. You continue paying GST/HST on their invoices and expecting to claim input tax credits.
Later, the CRA audits your return and determines the credits were claimed in error. You’re required to repay the GST/HST claimed and must chase the supplier for reimbursement.
Accounting software
Xero, MYOB, QuickBooks
Which countries it supports
Canada only.
Processes
This XBert falls under the "Purchases – Compliance" category.
To resolve this issue:
Verify the supplier’s GST/HST registration using the CRA’s GST/HST registry
If their status has changed, update the contact record in your accounting software
Request revised invoices if necessary (excluding GST/HST)
Consider seeking a refund or credit from the supplier for any overpaid GST/HST
Check whether any of these GST/HST amounts were already claimed on your returns and correct if needed