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Do I need to register for GST?

Do I need to register for GST?

The rules governing GST registration can be tricky to navigate. Here’s a breakdown of some of the more confusing jargon, and tips on where you can find the information that applies to your circumstances.

 


Why should you register?

You can register your business for GST at any time, but you are required to register when your gross business income is $75,000 or more, or $150,000 if you run a non-profit. If you provide a taxi service, you must register regardless of your business turnover.

It is usually a good idea to register for GST when your business hasn’t yet reached the GST threshold but is likely to do so soon. This will help you avoid a large tax bill later, as well as late payment penalties. Monthly cash flow forecasts can help you prepare. When you do hit the GST threshold, you will need to register within 21 days.

If your turnover is well under the threshold, you should weigh up the possible outcomes of registering. As well as increasing paperwork, GST registration also effectively increases your prices by 10 per cent, which can put you at a competitive disadvantage. On the other hand, GST registration can actually increase sales by making your business appear more professional.

How do you register?

You can register for GST online at abr.gov.au, by phone or form, or via a registered tax agent. To register online, you must sign up for an AUSkey account, which is linked to your ABN and is used to access a range of online reporting services, including business activity statement (BAS) lodgement.

How else can it affect turnover?

When you register for GST, you  may be entitled to claim back the GST that you pay on goods and services you have purchased for your business. This can be desirable if your net income is low and your expenses are high.

It can also increase your sales, as some customers may only want to buy from GST-registered businesses for this very reason.

How often do you have to report?

If you registered for GST voluntarily, and are not required to be registered, you can choose to report your GST earnings annually. Otherwise, if your annual turnover is $2 million or less, you may be eligible to report quarterly.

Knowing exactly when to register for GST can be tricky. This article should be used as an initial guide but should not be relied upon without seeking expert advice first. A tax accountant will be able to help you decide what’s best for your situation.

Whether you’re registered for GST or not, your annual tax return can have a profound effect on your business’ cash flow. Find out how you can stay ahead of your obligations.

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