When you’re running a business, sales tax, commonly referred to as the Goods and Services Tax (GST), is a key concept you’ll need to get familiar with – both for financial stability and to stay compliant with the Australian Taxation Office (ATO).
So, in this article, we’ll be providing an overview of all you need to know about GST and how it affects your small business.
What Do I Need To Do For GST?
Review key considerations below:
GST Registration
First things first, you’ll need to determine if you’re legally obliged to register for GST – which every business with an annual turnover of over $75,000 is.
Having said that, certain exceptions, including different GST thresholds, might apply to specific industries, so this figure can be subject to change. Non-profit organisations, for instance, need to have an annual turnover of $150,000 instead, so it’s worth consulting the ATO guidelines to understand your specific requirements.
Collecting GST
As a business owner, you’re required to collect GST on any taxable sales, which means you need to add the 10% GST to anything you sell to customers who aren’t registered for GST themselves.
Just ensure that your pricing includes GST, or it clearly specifies the amount of GST separately.
Lodging Business Activity Statements (BAS)
After this, you’ll need to report your GST activity to the ATO fairly regularly. This is done by lodging Business Activity Statements (BAS), and you’ll typically be doing this quarterly (businesses that make over $20 million annually need to do this monthly).
BAS might come with other tax obligations, too, such as Pay As You Go (PAYG) withholding and income tax instalments.
Seek Professional Guidance
GST obligations can be fairly challenging for small business owners, especially with the threat of penalties looming over your head.
To ensure you’re always staying compliant and receiving all the possible deductions you can, contact Accounting Tax Solutions today to find out how we can help. Whether it’s understanding your specific GST obligations or generally helping you keep accurate records, our accounting services ensure you’ll always be on the right side of the ATO.