XBert Type: Standard
Accounting Software: Xero
Country Restriction: Canada only
Risk Type: Tax Risk
Business Function: Compliance
Overview
The "Business has incorrect GST/HST status" XBert flags suppliers you are claiming GST/HST from who are no longer in a valid, active registered state on the Canadian company register. It helps you avoid claiming input tax credits you are not entitled to, which can lead to rejected claims, repayments and penalties from the Canada Revenue Agency (CRA).
What it does
XBert looks at the active supplier contacts in your accounting software that are set up to claim GST/HST on purchases and that you have recorded transactions against. It matches each supplier to their record on the Canadian company register and checks whether that business is still in an active, valid registered state.
How it works
XBert raises this alert when all of the following are true:
The supplier contact is active in your accounting software.
The supplier is set up to claim input GST/HST, so tax is being recovered on their bills.
You have recorded real activity against the supplier, such as bills or other transactions.
XBert has matched the supplier to a record on the Canadian company register.
That register record shows the business is no longer in an active, open state. For example, it has been dissolved, struck off or otherwise closed.
XBert deliberately ignores suppliers it cannot confidently match to a register record, suppliers that are inactive in your books, suppliers with no recorded transactions, suppliers whose register record is still active or open, and any alert you have already dismissed. This focuses the alert on suppliers where you are genuinely claiming GST/HST from a business that should no longer be charging it.
Example/Use Case
Daniel runs the accounts for a Toronto catering company. One of his regular suppliers, Maple Ridge Supplies Inc, has been a registered vendor for years, so their contact in Xero is set to claim GST/HST on every bill.
A few months ago Maple Ridge Supplies Inc was dissolved, but nobody told Daniel. His team keeps entering bills with tax and recovering roughly $260 of input tax each month. XBert matches the supplier to the Canadian company register, sees the business is no longer in an active state, and raises this alert.
Daniel confirms the dissolution, asks the supplier for revised invoices without GST/HST, corrects the affected bills and adjusts his next return, avoiding a CRA reassessment and penalties.
Accounting software
Xero
Which countries it supports
Canada
Processes
This alert falls under the Compliance business function and is about keeping supplier GST/HST details accurate. To resolve it:
Review the flagged supplier and the registration details XBert has matched.
Confirm the supplier's current registration and GST/HST status with the CRA, for example using the CRA GST/HST Registry, or ask the supplier for proof of current registration.
If the supplier is no longer validly registered, update their contact in your accounting software so GST/HST is no longer claimed on their bills.
Request revised invoices without GST/HST from the supplier where needed.
Review any GST/HST already claimed from this supplier and correct it, for example by adjusting an upcoming or amended return.
Stop claiming GST/HST from any supplier who is not currently registered.
Once the supplier's details are corrected, mark the XBert as resolved.
Taking these steps keeps your GST/HST reporting accurate and compliant, and helps you avoid repayments or penalties from the CRA.