One of the most common questions I get from business owners is – do I have to register for GST?
And then come a flurry of follow up questions like how do I know, where do I register, what do I do after I register, what’s a BAS? But stress no more! In this guide, we’ll break down the essentials on when and why you should register for GST.
But first up, what is GST?
It stands for Goods and Services Tax. It’s a 10% tax on most goods, services, and other items sold or consumed in Australia. It’s a vital part of our tax system. Registering for GST also allows you to claim back the GST you pay on business expenses – definitely a win!
When Should You Register for GST?
So, you’re up and running with your business, and now you’re wondering, “How do I know if I need to register for GST?”
First things first, make sure you’re set up on an accounting software and have your bookkeeping up to date. We recommend Xero and reaching out to a Bookkeeper or Accountant if you’re behind and need help cleaning your books up to scratch.
Here are the key thresholds to keep in mind:
Your Business Turnover Surpasses $75,000:
The magic number is $75,000. Once your business’s annual turnover exceeds this threshold (calculated on a rolling 12-month basis), it’s time to register for GST. If you’ve already passed the threshold, you will need to look at backdating your GST registration date.
Projected Turnover:
Even if you haven’t hit the $75,000 mark yet, but your business is expected to surpass it in the next 12 months, it’s advisable to get ahead of the game and register for GST.
Specific Business Activities:
Some industries have different GST thresholds. For taxi and rideshare drivers, you will need to register for GST straight away, regardless of your turnover amount.
Non-profit organisations and certain food retailers have their own unique thresholds. Check with the ATO to ensure you’re in the know for your specific industry.
How to Register for GST?
Met any of the above thresholds? Great! Now, let’s talk about the how part of registering. The process is simpler than you might think:
Create an AUSkey:
Head to the ATO’s Business Portal and create an AUSkey. This lets you access a range of government online services, including GST registration.
Log In and Register:
Once you have your AUSkey, log in to the Business Portal and select “Register for GST.” Follow the prompts, providing the necessary information about your business.
Stay Compliant:
After registration, it’s crucial to stay on top of your GST responsibilities. Keep accurate records through your chosen accounting software and lodge your activity statements on time. These are typically due each quarter, but some businesses may need to lodge monthly.
GST might sound daunting, but it’s all about knowing where you’re at so you can meet your business obligations.
So, whether you’re on the brink of the $75,000 turnover or you’re eyeing it in the near future, understanding when and how to register for GST should be a priority for your business.