Our Beginner's Guide to Registering for GST in Australian Businesses
Running a business involves plenty of financial and tax obligations, including complying with Australia’s Goods and Services Tax (GST) requirements for online and offline entrepreneurs.
What is Goods and Service Tax (GST)?
By definition, GST is a value-added tax of 10 percent that is often levied on most goods and services sales. Businesses often register for GST to lower the cost of administration, individual income tax rates and boost investments or savings for your bottom line.
GST can provide a wealth of benefits for small businesses and even establish a presence. However, it can be tricky since it requires small businesses to complete a Business Activity Statement (BAS) every quarter of the year.
Failing to comply with the BAS requirements on time can result in problems with the ATO, which can be a significant bottleneck for your operations.
How Does the GST Work?
With the current rate of GST, you can expect all your goods and services to have a 10 percent addition, which should go directly to the ATO. If you’re selling $100 worth of goods, for instance, the GST will add 10 percent, which means the total cost will bump up to $110.
You will always be charged with 10 percent in GST when buying supplies and other forms of equipment for your business, but the advantage is that you can claim it back as a credit. By the quarter of the year, you need to compute the total GST you gathered from your sales and subtract the amount to the credits on your purchases.
The result will be the amount payable, which you can determine by paying the net GST to the ATO.
Does Your Business Need to Register For GST?
Businesses with an annual turnover of $75,000 or more are required to register for GST, while others with less than the said turnover threshold have the option to turn it down. Once you meet or go beyond the amount, you have within 21 days to register for GST.
Of course, not all requirements are the same for different businesses. Not-for-profit organizations can reach a turnover of a whopping $150,000 before they are required to register. At the same time, taxi drivers and other ride-sharing drivers need to register immediately regardless of their turnover rate.
To that end, you can easily register for GST online or apply for an AB through the Australian Business Register (ABR) website.
The Bottom Line: Hiring an Accountant to Handle Your GST
The GST tax system can put an unimaginable strain on Australian businesses as companies need to ensure they stay compliant and meet lodgement deadlines to the dot.
With that in mind, hiring professional accounting and bookkeeping services can ease your workload as they can provide GST consulting and tax-effective advice to ensure your business stays compliant.
If you’re looking for quality accountants that provide accounting and bookkeeping services for your entrepreneurial ventures in Mermaid Beach, we’re your best option! We can help your business register for Goods and Services Tax (GST) in no time, so contact us at (07) 55041999 and see how we can help you!