When you decide to start a new business you firstly need to register for an Australian Business Number (ABN) then you need to work out if you need to be registered for GST.
If you run multiple businesses under the one ABN you are only required to register for GST once.
When do you need to register for GST?
You must be registered for GST:
- When your turnover (meaning income) is $75,000 or more. Please note the $75,000 is not your overall annual profit, this relates to your income received during the year.
- When you start a new business and expect your turnover to reach the GST threshold
- When you already are in business and have reached the GST threshold
- If you’re a non for profit organisation and have a turnover of $150,000 per year or more
- If you provide taxi or limousine travel for passengers (including ride-sourcing) regardless of your GST turnover, this is for both owner-driver and if you lease or rent a Taxi
- If you want to claim Fuel Tax credits for your business
If your business does not fit the above descriptions then you still have the option to register for GST. Please note that if you register for GST you are required to stay registered for at least 12 months.
Example: registering for GST as a trust
Kelly is a tap dancer who posts her videos on social media platforms. She enters into an agreement with a social media platform as a trust.
The social media platform places advertising on Kelly’s videos. Kelly’s trust receives a percentage of the advertisement revenue from the social media platform when advertisements on her video clips are viewed.
As the social media platform operator is an Australian entity, the trust’s sale to the social media platform is a taxable sale.
Kelly’s trust receives over $75,000 in advertising revenue, so it is required to register for GST and pay GST on the payments received.
If you require assistance in registering for GST please contact our office and we will be able to arrange this on your behalf.
What happens if I don’t register for GST?
If you don’t register for GST and are required to, you may have to pay GST on sales made since the date you were required to register. This could happen even if you didn’t include GST in the price of those sales. You may also be required to pay penalties and interest.
You have up to 4 years that you are able to backdate your GST registration. This means, unless there is evasion or fraud:
- we can’t backdate your GST registration by more than 4 years
- you are not required to be registered before that date.
Author
Natasa Briffa
