If you are in business, and turning over more than $75,000 of business income or commercial rent, then you must be registered for GST. If you business income is below this amount, then you can voluntarily register for GST and lodge monthly, quarterly or annual Business Activity Statements (BAS).
Understanding your obligations and planning for future expansion is important, and for this reason many businesses who think they might get close to the $75,000 threshold, just decide to register for GST from the outset.
So what does it all mean being GST registered?
Generally you will need to charge 10% on top of your prices as you are acting as the tax collector on behalf of the ATO. Depending on how you set your prices, it might mean adding the 10% GST on top of your normal prices, or your selling price might be deemed to include GST depending on your industry classification.
So if I am registered for GST, will all of my income have GST?
Short answer is no, not everything.
Some things are exempt from GST: fresh food, education, some health services, the sale of ‘old’ residential property, most investment income (bank Interest, Dividend, residential rent) etc
Well if I am registered for GST, I get 10% of my purchases back as a refund, right?
Well again, no, not on everything.
There are some exempt expenditure which either does not have a GST credit, or it is denied, such as:
Bank Fees & Interest, Superannuation, Wages, Land Tax, Payroll Tax, residential property outgoing expenses etc.
And when it comes to things like motor vehicles, which may be partly private, then its important to apportion the GST correctly into being part business (deductible) and part private use(GST not claimable).
There are many specific rules & requirements, and it always pays to talk to a GNS Accountant to better understand your situation, particularly with things such as property development as this can be a complex area.
When it comes to quarterly or monthly reporting of your GST figures, its important to make sure you are holding a valid tax invoice for all of your purchases as this entitles you to claim back a credit. Similarly, you need to understand if you are registered on a cash or accrual’s basis for GST – ie, do you only have to remit GST on your income when you receive payment from your customers (cash basis) or do you have to remit GST when you raise an invoice, even if you are not paid (accrual basis).
The next consideration is how you will maintain your GST records, which is generally the same way you would track your business activity for income tax purposes. The most common bookkeeping software solutions are Xero, MYOB or Banklink.
The GST Team can either work with you to prepare your own quarterly BAS, or we can complete and lodge your BAS for you from the records you put together or in conjunction with your bookkeeper.
GNS Group do not have our own bookkeepers, but are happy to recommend and introduce you to some suitable ones that we have worked with previously and most importantly, been happy with their accuracy.
If you would like to find out more about your GST obligations and how GNS may be able to assist you, then please contact us today.