The bank deposit is not the taxable event
A block fee collected in December for a trial in February is the client's money until the work is done and the bill goes out, so it lands in the later year's income, not the earlier one. The same timing governs HST: it generally becomes collectible when you deliver the invoice, not when funds reach trust, which means a licensee remitting on deposits is prepaying tax on fees not yet earned. The reverse error is worse: matters finished but unbilled at December 31 are income the CRA expects to see.
This is why we will not prepare a paralegal return from a bank feed alone. The practice-management billing journal and the trust ledger carry the real dates, and when the CRA runs its routine comparison of reported revenue against HST filings, the two reconcile because they were built from the same records.
The $30,000 line, and how paralegals actually cross it
Plenty of licensees start part-time, a docket of provincial-offences files built on referrals and evenings, and the small-supplier threshold means no HST registration until worldwide taxable fees pass $30,000. The trap is that the line is measured over four consecutive calendar quarters, not over a tax year, and it moves under you as the practice grows.
| How you cross $30,000 | What happens |
|---|---|
| Gradually, across four consecutive quarters | Small-supplier status runs out a month after the quarter that tipped it; registration is due before your next taxable fee |
| Inside one single quarter | Status ends immediately, and the fee that crossed the line is already taxable |
| Not yet, but your costs carry HST | Voluntary registration opens input tax credits on software, insurance and rent while fees are still building |
We track the running four-quarter total and register at the right moment, because charging 13% late means paying it out of your own fee. Once registered, filing frequency is a choice, annual with instalments, quarterly, or monthly, and we set it to match the practice's cash rhythm rather than defaulting.
Two HST treatments on one small bill
Court and tribunal filing fees you pay as your client's agent are re-billed exactly as paid: no HST added, no input tax credit claimed. Your own file costs, mileage, printing, postage, are part of your fee and carry 13% when recharged, even though some of them cost you no tax at all; CRA policy statement P-209R draws the line between the two. On one Small Claims file, where claims run up to $35,000 but the paralegal's fee is fixed and modest, the difference is pocket change. Across a few years of high-volume filings it compounds into exactly the kind of pattern an HST examiner is trained to find.
We separate the two treatments in your billing setup and test a sample at every HST filing, so the classification stays right without anyone thinking about it file by file.
The return that matches your structure
An unincorporated paralegal reports practice profit on form T2125 inside the T1: the return is due June 15, the balance owing April 30, and once net tax owing tops $3,000, the CRA expects quarterly instalments it will charge interest on whether or not you noticed the reminder. A professional corporation files a T2 within six months of its chosen year-end and pays roughly 12.2% on its first $500,000 of active income in Ontario, with your salary or dividends flowing onto a personal return prepared alongside. We handle both through Corporate Tax Filing and Personal Tax Filing, on a schedule that respects hearing dates instead of colliding with them.
After a strong year we recompute instalments early rather than letting the prior-year formula understate them, and after a lean one we cut them so the practice is not lending the CRA money. When a letter does arrive, a pre-assessment review of an HST return, a request for the vehicle log, CRA Audit & Review Support answers it from working papers we already hold, so a routine query never costs you a week of hearings.
Source: CRA — When to register for and start charging the GST/HST.
