A few months ago, Dining Date Night began offering customers a 30% discount at various restaurants in Toronto. In order to get the discount, a customer books a reservation on a website and pays a $10 fee to Dining Date Night. When the customer visits the restaurant, 30% of the total bill (before taxes) is deducted as a discount. This type of promotion is relatively good for both the consumer and the restaurant that provides the discount, because the restaurant can restrict the hours when reservations may be taken.
Archive for the ‘HST’ Category
Posted in Canada Revenue Agency, GST, HST, Income taxes, Sales Tax, Taxes, tagged Audits, Canada Revenue Agency, Canadian Restaurateur, CRA, Customer comps, excise tax act, GST, harmonized sales tax, HST, Income tax, POS, Sales Tax, tax auditors, tax audits, Taxes, technology on June 20, 2012| 9 Comments »
I’ve written a couple of articles about Groupon on my sister blog, Canadian Restaurateur. This is part of a series that will cover accounting for Groupon certificates, setting up your Point of Sale (POS) system to properly track coupons and discounts, using QuickBooks to enter Groupon transactions, examining the tax treatment of Groupon certificates (this one), and finally, determining whether your restaurant should consider Groupon.
When the Ontario government repealed the Retail Sales Tax (RST) in favour of the new Harmonized Sales Tax (HST), it transferred audit and collection activities to the Canada Revenue Agency. Unfortunately, that doesn’t mean Ontario restaurants can forget about the old RST!
Ontario is still responsible for auditing the old RST for periods up to June 30, 2010. Under the Statute of Limitations, Ontario has up to four years to audit the RST. Actually, they can go back more than four years, if they can show fraud or misrepresentation or if they obtain a waiver from the taxpayer.
Many of these Ontario auditors will be transferring to the CRA in 2012. So, they are racing to complete audits of most Ontario RST vendors. This is especially true for Ontario restaurants, which have always been a target of the Ministry of Revenue.
We all know that some amount of alcohol will be pilfered. Don’t you love that word? Pilfered. Sounds like a mere pittance. It is anything but. As a rule of thumb, the cost of the theft will be about three times the cost of the alcohol that is, ah, pilfered.
If you’ve been following recent posts on my sister blog, Canadian Restaurateur, you may have noticed a theme. Theft. All restaurateurs know that theft is a significant issue that requires our constant vigilance. The cost of the stolen product is bad enough, but if you also have to pay tax (plus penalties and interest) on the retail value of the stolen product, it becomes a huge issue. Everyone knows it isn’t right that a restaurateur should have to pay tax “as if” the stolen alcohol had been sold. Unfortunately, that isn’t the way it works in most tax jurisdictions.
Huh? Do you mean that if I never over-pour drinks, my establishment can still be accused of under-reporting my sales (and taxes) during an audit? That can’t be right! Can it? Unfortunately, it IS true for almost every restaurant and bar in Canada! Today’s post explains how this happens and what you can do about it.
Most restaurants and bars use shot glasses or portion control pourers to accurately measure the amount of liquor that goes into cocktails, mixed drinks and shots. Meticulously training bartenders and monitoring pouring, you’re fairly confident that your pouring is fairly accurate, if not “perfect”. Even if it is, your establishment will be over-pouring all of your liquor drinks by at least 4%!
Recently, the Canadian Restaurant and Foodservices Association (CRFA) published three calculators to help restaurateurs determine the effect on the new HST, effective July 1, 2010, on their prices. The calculators cover wine, spirits and beer. I’ve included the links, below. You can read more and find a discussion on their use and potential effects on your menu pricing in July, here.
Posted in Canada Revenue Agency, GST, HST, Income taxes, Ministry of Revenue, PST, Sales Tax, Taxes, tagged Audits, CRA, GST, HST, Income tax, Ministry of Revenue, POS, PST, RST, Sales Tax, tax evasion, zappers on February 7, 2010| Leave a Comment »
Despite what has been published in the press and disclosed by the CRA and the Ministry of Revenue Quebec (MRQ), the use of zappers has not reached epidemic proportions in the restaurant industry. Zappers have been around since the mid-1990s, though most of the usage seems to have been confined to Quebec. In fact, the vast majority of the convictions for sales tax evasion have occurred in Quebec. For background on the use and abuse of zappers, please read this, this, and this. The unfortunate thing about all of this attention is that it may draw our attention away from a far larger threat to our operations. The indirect audit approach.