BUSINESS NUMBER AND CRA PROGRAM ACCOUNTS

The business number (BN) is the CRA's identifier for a business. A sole proprietor does not need one simply to earn business income, because that income is reported under the proprietor's social insurance number. A BN becomes necessary once the business has to deal with the CRA as a business: collecting GST/HST, hiring employees, or importing and exporting goods. This page explains how the BN and its program accounts are structured, when each is needed, how to register, how to manage the accounts online and through representatives, and what to do when details change or a program is no longer needed.

HOW THE NUMBER IS STRUCTURED

• Business number: a nine-digit number unique to the business. A sole proprietor has one BN, even if they run several unrelated businesses.

• Program identifier: two letters added to the BN to show which CRA program an account belongs to.

• Reference number: four digits after the program letters. The first account in each program is 0001.

• Example: 123456789 RT0001 is the first GST/HST account of business number 123456789.

PROGRAM ACCOUNTS A SOLE PROPRIETOR MAY NEED

• RT, GST/HST: required once taxable sales exceed the $30,000 small supplier threshold, or opened voluntarily earlier to claim input tax credits.

• RP, payroll deductions: required before the first payday for an employee, including a family member on the payroll.

• RM, import-export: required to import goods into Canada for commercial purposes or to export goods that must be reported.

• RZ, information returns: used for some information slips, such as T5018 construction subcontractor reporting, where the business has no payroll account.

• Not needed: the RC corporate income tax account applies only to corporations. A sole proprietor's income tax stays on the personal T1 return.

HOW TO REGISTER

• Business Registration Online: the CRA's online service issues a BN and opens program accounts in one step. In several provinces it can also complete certain provincial registrations at the same time.

• By phone or by mail: through the CRA's business enquiries line, or by sending Form RC1, Request for a Business Number and Certain Program Accounts.

• Information needed: the owner's name, social insurance number and contact details, the business name and address, a description of the main activity, and the expected start date and sales for the programs being opened.

• Adding programs later: once a BN exists, new program accounts are added to it rather than applying for a new number.

MANAGING THE ACCOUNTS

• My Business Account: the CRA's online portal for filing and paying GST/HST and payroll, viewing statements and notices, and updating account details.

• Sole proprietors and My Account: because the owner and the business are the same person, a sole proprietor can also reach business accounts through the CRA's individual sign-in.

• Authorizing a representative: a bookkeeper or accountant can be given online access to some or all program accounts through the CRA's Represent a Client service, with the owner approving the request in My Business Account.

• Direct deposit and payments: set up direct deposit for refunds, and use online banking or pre-authorized debit for remittances, so payments are matched to the right program account.

CHANGES AND CLOSING ACCOUNTS

• Updating details: changes of address, business name, fiscal year-end or filing frequency must be reported to the CRA so notices and returns go to the right place.

• Closing a program account: when the business stops having employees, or deregisters for GST/HST, the specific program account is closed. Final returns and remittances must still be filed.

• Moving to a corporation: a business number belongs to its owner. If the business incorporates, the corporation gets its own BN and program accounts; the proprietor's accounts are closed separately.

KEY POINTS

• Not always required: a sole proprietor needs a BN only for GST/HST, payroll, import-export or certain information returns.

• One BN, many accounts: each program adds its own two-letter, four-digit account to the same nine-digit number.

• Register online: Business Registration Online opens the BN and program accounts in one step.

• Keep it current: update changes promptly and close program accounts that are no longer needed.

SOURCES

• Canada Revenue Agency: Business number and program accounts; Business Registration Online.

• Canada Revenue Agency: Form RC1, Request for a Business Number and Certain Program Accounts.

• Canada Revenue Agency: My Business Account and Represent a Client.