Many new business owners aren’t sure whether they actually need to register for GST, or whether it’s something they can put off until the business grows. However, GST registration becomes mandatory once you cross a specific turnover threshold, and getting the timing wrong can create real compliance problems.
You’re required to register for GST once your business’s current or projected annual turnover reaches the GST threshold. Consequently, it’s important to monitor your turnover on a rolling basis, not just at the end of the financial year, since the obligation kicks in as soon as you reach or expect to reach that threshold.
Businesses below the threshold can choose to register voluntarily. Therefore, some smaller businesses register early particularly if most of their clients are GST-registered businesses themselves, since it allows the business to claim GST credits on its own purchases.
Taxi and ride-share drivers are required to register for GST from their very first dollar of income, regardless of how small their turnover is a rule that surprises many people entering this kind of work.
You must charge GST on taxable sales. This means adding GST to your invoices and passing that amount on to the ATO, rather than keeping it as business income.
You can claim GST credits. In exchange, you can generally claim back the GST you’ve paid on business-related purchases and expenses.
You need to lodge a BAS. Registration brings a requirement to lodge a Business Activity Statement, generally quarterly, to report and reconcile GST collected and paid.
If you should have registered but didn’t, the ATO can require you to pay GST on sales made during that period even if you never actually collected it from your customers. Therefore, monitoring your turnover proactively is far safer than waiting until tax time to review it.
Registering voluntarily adds an ongoing compliance obligation BAS lodgments and GST tracking even if your turnover doesn’t require it. Consequently, it’s worth weighing the benefit of claiming GST credits against the additional administrative work involved.
Reviewing your turnover regularly, rather than only at EOFY, is the most reliable way to know whether registration is approaching. Therefore, this is a conversation worth having with your accountant well before you expect to cross the threshold, not after.
EBATS helps business owners monitor their turnover, register at the right time, and manage BAS lodgements without the guesswork.
📍 Suite 2.2/47 Queen St, Campbelltown NSW 2560, Australia 📞 0404 471 816 🌐 www.ebats.com.au 📧 [email protected]
Ethical Accounting & Taxation Services | Campbelltown NSW | Trusted Tax, Accounting & Business Support Since 2011