If you have business income of $75,000 or more ($150,000 for non profit organisations) you must register for GST. Failure to register for GST can result in you being liable for 1/11th of your income plus penalties.
If your income is lower than this than registering is optional, and if you do register for GST then you must stay registered for 12 months and you will need to include GST in the price of most goods and services you sell and you can claim the credits for the GST included in the price of the business purchases.
If you provide taxi or limousine travel as part of your business you must also register for GST regardless of your business income.
If your GST falls below the registration threshold you can chose to cancel your GST registration. You must cancel your GST registration if you are not carrying on a business and if your business structure changes.
When you cancel your GST registration, your fuel tax credit, luxury car tax and wine equalisation tax registrations will also be cancelled. However, your PAYG and FBT will still continue and you will still need to keep lodging activity statements unless you cancel these also.
If I don’t have to register for GST should I still register ?
For you to decide on whether to register for GST or not you should think about the following points:
- If you are registered you can claim the GST on your purchases and its great if you make large capital investments like computers or motor vehicles.
- Some businesses prefer to do business with GST registered businesses so they too can claim back the GST.
- Some businesses are concerned about doing business without non registered businesses perhaps questioning their credibility.
- Extra administration work involved and producing quarterly BAS returns. Perhaps you need a bookkeeper or accountant to assist you.
- If you are registered you must add 10% GST to each invoice.
- Perhaps you are in a profession that does not have to charge GST – e.g. physiotherapists.
- If you have individuals as clients, they can not claim GST so when you do not charge for it, your services will be 10% cheaper for them, or you make 10% more profit.
If you have any further suggestions or comments we would really like to hear from you below.