Not every business needs to be registered for the Goods and Services Tax (GST), but it’s important to know the rules if and when your business reaches that milestone.
You must register for the GST when:
- your business or enterprise has a GST turnover (gross income from all businesses minus GST) of $75,000 or more.
- when you start a new business and expect your turnover to reach the GST threshold (or more) in the first year of operation.
- if you’re already in business and have reached the GST threshold.
- if your non-profit organisation has a GST turnover of $150,000 per year or more.
Once you’ve reached the threshold to register for GST, you have 21 days to do so.
Firstly, you will need an Australian Business Number (ABN). Once you have your ABN, you can register for GST online at: www.ato.gov.au; by phone: 13 28 66; or through your tax agent.
You only need to register for GST once, even if you operate more than one business and you can also cancel your GST registration if you’re no longer required to be registered.
Once you’ve registered for GST, you will need to complete regular Business Activity Statements (BAS). A BAS is used to report all the GST charged on your sales, and the credits on your business purchases, as well as your Pay As You Go (PAYG) instalments, and PAYG withholding tax.
Businesses with a turnover of more than $20 million must complete a monthly BAS, but otherwise, BAS forms are due quarterly.
Registering your business for GST also enables you to claim GST credits.
GST credits are tax imputation credits available to businesses concerning the goods and services they purchase for sole or part use in their businesses. These credits can be used to offset the amount of GST you are liable to pay to the government, reducing your business tax obligations.
When your GST credits are greater than the amount of GST owed to the government, you may be entitled to a refund.
It’s important to make sure your business is structured correctly before registering for GST – changing your business structure might mean you have to cancel your GST registration and then register again.
GLG Legal are accredited specialists when it comes to business structuring, GST, and all aspects of tax law.
Get in touch with Bickell & Mackenzie today to see how we can help you and your business in the Redlands and beyond. Follow the link here to contact us today!