SB Partners


How can you prepare yourself to meet these challenges, while taking advantage of every opportunity? Businesses should invest in streamlining their business processes now to ensure future prosperity.

SB Partners provides accounting services to diverse construction and real estate clients, from small businesses to large firms. Our team brings a depth of expertise and breadth of scope you would expect from a larger firm—but we offer our personal approach and regional focus. You benefit from strategies and solutions that will get you the results you need.

Our construction and real estate clients gain access to a vast network of professionals, including bankers and lawyers. We understand your special needs. Our team is informed of the issues and trends affecting your industry. Together we can help you establish a sound foundation for your business, and build a profitable future.

Harmonized Sales Tax in Ontario

On July 1, 2010 the Ontario Retail Sales Tax (RST) will be combined with the federal Goods and Service Tax (GST) to create a federally administered Harmonized sales tax (HST). The HST would have a combined rate of 13% of which 8% would be the provincial portion and 5% would be the federal portion. The HST, except for some exceptions, would generally use the same rules and tax base as the GST.

IMPORTANT:

An RST rebate will be available for the RST paid on construction materials that were held in inventory immediately prior to July 1, 2010 and used as part of a repair or improvement to residential properties on or after July 1, 2010 and before January 1, 2011 on which HST was collected. Please click here for more information »

What does this mean to contractors

  • Contractor services are currently not subject to RST in Ontario. Under the HST system contractor fees will be subject to HST resulting in an 8% increase in the total charge for such services. This increase should not be an issue for business customers entitled to claim input tax credits for the HST but will result in an increase in costs for consumers and businesses not entitled to claim input tax credits.
  • Although RST does not apply directly on construction projects, the RST on the building materials is a cost to the contractor and is incorporated into the contractor’s price. With the removal of RST and the introduction of HST, the contractor will be able to recover the full HST by claiming an input tax credit in the GST/HST return, thus reducing costs to the contractor.
  • The HST will mirror the GST system with some differences. During the first eight years of the tax, business with taxable sales in excess of $10 million, will need to modify their systems to deal with the restrictions in claiming input tax credits for certain categories of expenditures, including energy, other than for producing goods for sale, telecommunications, food, beverage and entertainment and road vehicles weighing under 3,000kg.

Contractors should consider the following:

  • Review the impact of HST on their costs and review their pricing to ensure that the savings from the removal of the RST on their costs is passed on to their customers. This will provide a competitive advantage.
  • Consider postponing certain major purchases until after the implementation of HST. This may result in a tax savings.
  • Systems currently used to comply with the GST will need to be modified to handle the HST. Modifications will include accounts receivable and billing systems and well as accounts payable.
  • Plan and modify their systems to deal with the removal of RST from costs.
  • Review contracts with their customers to ensure they can contractually add on the provincial component of the HST to their prices.

MAESTRO TECHNOLOGIES INC.

At SB Partners, we are always on the lookout for state-of-the-art technology tools that can help our clients. We saw the advantages with Maestro Technologies’ management and accounting software. We were impressed with the system’s design and its ability to generate sophisticated and customized financial reports fully integrated with a project management system. The software is specifically designed for the construction industry including general contractors, heavy and civil contractors, homebuilders, trade and service contractors, concrete and aggregate producers, drilling and mining and project based operations.
If you are in the construction sector, we think it is worth checking out. For more information visit www.maestro.ca or contact Michael Rennie at m.rennie@maestro.ca

Next Steps

Talk to our Construction & Real Estate Practice Group:

Proud Members of the Hamilton Halton Home Builders Association.

HST is here on July 1st - Be prepared with our free guide
What our Clients Say

Joanne Pellegrino, Accountant, Izumi Outdoors Inc.

"In the three years that Ive been dealing with SB Partners I have always found them to be courteous, thorough and professional. Their work on our annual statements and tax returns is exceptional and their expertise makes my job a whole lot easier."