I am often approached by small business owners wondering how and when they need to register for GST. So, what is GST? As most of you already know, is GOODS & SERVICES TAX.
Do you need to register? No necessarily. GST is mandatory for those entities whose turnover is over $75,000 per year. However, for non-profit organisations the threshold is $150,000 per year.
How do you know if you meet the threshold? Simply have a look at your books > Income Statement > GROSS PROFIT. That is the figure you need to check on a regular basis (monthly, preferably). If you notice that the threshold has already been reached, then the ATO gives you 21 days to register from the moment your turnover exceeds the threshold.
You cannot remember if you registered for GST, how do you find that out? Easy-peasy, just click on https://abr.business.gov.au/, insert your business name or ABN, and all the available information will be there for you (for free!).
Does this threshold apply to any industry? No really. If you provide travel services (e.g. taxi), you must register for GST regardless of the annual turnover.
Ok, you are about to reach the threshold… how to register? Ask your bookkeeper to register for you, or do it yourself following the instructions on this link https://www.ato.gov.au/Business/GST/Registering-for-GST/.
You are registered, what happens next? BAS! Every quarter (or monthly if you prefer) your Bookkeeper will need to prepare and lodge your Business Activity Statements (BAS). In this statement, your gross profit, expenses and GST payable and receivable will be stated, resulting in either a payment to the ATO or a credit from the ATO.
Do you have any questions? Post them below! 🙂