As a small business, growth can be both challenging and rewarding. Many start out quite small and may not have registered for any of the Australian tax registrations required to run a business. The most common being the Goods and Services Tax (GST).
When do I need to register for GST?
The GST registration may be required for small businesses based on a set threshold for profit and non-profit businesses. Your business will need to register for GST if you meet any of the criteria below:
- when you have an annual turnover (gross income minus GST) of $75,000 or more
- if you provide taxi travel for passengers (including ride-sourcing) regardless of your GST turnover
- if you want to claim fuel tax credits for your business
Your circumstances can change quite rapidly and it is advisable to check each month to see if you’ve reached the GST threshold.
Why do I need to register for GST?
A business that is GST registered not only charges clients and customers for their goods and services but can also claim back the GST portion of any business related goods and services that have been purchased. The difference between the GST collected and the GST paid is then paid to (or refunded from) the Australian Taxation Office (ATO) via activity statements.
For example, if your business purchased a new computer from a GST registered supplier for $1100, you can claim the $100 GST fee on your activity statement.
There could be financial ramifications if you do not register for GST. If your company reaches the threshold but has not applied for GST you may be required to back pay GST on sales made since the date you were required to register. That’s why constantly monitoring your books and tracking your business turnover is critical to running your business.
How do I register for GST?
Businesses can register online at the ATO Business Portal or they can engage with a registered BAS Agent. Registered BAS Agents not only assist with the paperwork of the initial GST registration, but also take the stress away on a regular basis as they perform data entry and record keeping, submit activity statements, liaise with Tax Agents and ensure your business is compliant with ATO requirements. They take care of the books so you can concentrate on what you do best to generate income for your business.
Do you meet the GST threshold? Now is the perfect time to dive in to your books and check your business turnover.
Talk to us today to find out how we can manage your books and monitor your turnover.