Businesses providing taxable goods and services in Canada must

register to collect either GST or HST$,$ depending on where the

business is registered. The federal government has set the GST rate

at $5\%.$ The HST varies by province. Since July $1,2010,$ the province

of Ontario has had a rate of $13\%$ HST$.$ A company must remit its

GST$/$HST collections either on a monthly, quarterly, or annual

basis, depending on the amount of annual revenue. At the end of

each fiscal year, registrants must file a return summarizing the

collection of GST$/$HST$,$ the GST$/$HST paid by the registrant $($input

tax credits or ITCs$),$ and periodic payments made to the Canada

Revenue Agency $($CRA$).$ The CRA then uses this information to

calculate a business$$s maximum periodic instalment payment for the

following year. The government gives small businesses with annual

revenues of under $$30000$ the option of registering to collect and

remit. If businesses choose not to register, they do not have to

charge GST$/$HST on their goods or services. The disadvantage is that

they are then ineligible for a credit on the GST$/$HST paid on their

supplies. If a business has registered and has annual taxable

revenues less than $$400000,$ the Quick Method can be used to

calculate ITCs. When using the Quick Method in Ontario, the

registrant charges customers $13\%$ HST on sales of goods and

services. The ITCs for the business are calculated by adding all

purchases and expenses including the HST$,$ and then subtracting

employees$$ salaries, insurance, and land. The taxable expense

amount is then multiplied by $13/113.$ The result is the amount of

ITC. Under the Quick Method, the numbers in the calculation vary by

province.

a$.$ Simon operates an HST$-$registered mobile glass repair service in

Ontario. His service revenue for the year is $$28000.$ His HST

taxable purchases amounted to $$4000.$ Simon does not use the Quick

Method for claiming ITCs. By calculating the difference between the

HST he collected and the HST he paid, determine Simon$$s HST

remittance to the CRA.

b$.$ Courtney operates a souvenir gift shop in Ontario. Her business

is registered for the Quick Method of calculating ITCs. Her HST

taxable sales were $$185000$ for the year. HST$-$taxable purchases of

goods for resale were $47\%$ of sales. In addition, Courtney paid $$48$

$000$ in purchases and expenses, which included $$42000$ for salaries

and insurance.

i$)$ Calculate how much HST Courtney remitted to the CRA when using

the Quick Method.

ii$)$ If she had not chosen to use the Quick Method of calculating

ITCs, how much HST would she have to remit?

iii$)$ What is the difference in remittances under the two

methods?