GST do I have to pay it?

They say two things are certain in life, death and taxes. We certainly hope your small business lives a long and prosperous life and that you never fall foul of the taxman.  In this guide, we will explain the GST and demonstrate that it is not a tax you pay, but rather one you help collect from the final consumer.

WHY do I need to register?

If your business exceeds $75,000 turnover or provides taxi or ride-sharing services, you must register and charge for GST! You need to register within 21 days of exceeding the turnover threshold.

WHAT are the steps to follow for Standard GST registration?

1. Register for GST online, by phone or through a registered agent. Ensure you obtain an Australian Business Number (ABN) first. https://www.ato.gov.au/Business/GST/Registering-for-GST/
2. Determine which of the goods and services you sell must include GST.
3. When you sell something, for which GST is included, you must issue an invoice clearly showing the 10% GST added.  For example, $100 x 1.1 = $110 inc GST. Under Australian legislation, all goods and services pricing should be indicated as the total price with GST included. For example, from the previous example, $110 inc GST, not $100 ex GST.
4. GST credits for anything that you have bought for your business. Collect tax invoices that show GST has been paid . Link

5. Your accounting system should clearly show how much GST you have collected and paid. (Be sure to read our essential guide on Accounting software as this will simplify the process). Ensure you set aside any GST money you have collected, as it must be paid to the tax office; it is not part of your business’s revenue. You will pay the GST collected, minus your allowable credits, to the ATO.
6. Lodge a BAS statement. A Business Activity Statement (BAS) is your report to the ATO on your GST activity. You can lodge online through MyGov, the ATO Business Portal, directly through some accounting software, a tax agent, or by mail.
   If your turnover is less than $20 million, you must lodge returns quarterly; otherwise, returns are due monthly. For more details, refer to our ‘How to Complete a BAS’ guide.

HINTS

• Keep good records
• Ensure your sales reconcile with your bank statements
• Keep all your tax invoices and GST records for 5 years
• GST is not claimable on private expenses such as entertainment and food
• All claims must be in Australian dollars
• When claiming a tax credit for less than $82.50, you only need one of the following: a tax invoice, a cash register receipt, a receipt, or an invoice.
• You cannot make credit claims for invoices that do not include GST
• Further GST and BAS tips can be found on the ATO website

SUMMARY – GST do I have to pay it

In summary, GST will be an integral part of your business, so ensure you maintain accurate records and employ an appropriate person to assist you, or utilise a software tool, to ensure compliance.