Understanding and managing GST is crucial for businesses operating in Australia. GST is a set rate of 10% – applies to most good and services and items sold or consumed within the country. If your business is GST Registered, it becomes your responsibility to collect an extra 10% from your customers and remit it to the ATO.
Who Needs to Register for GST?
Businesses with a GST turnover of $75,000 or more. Non Profit organisations with turnover of $150,000 or more, providers of taxi/limousine travel and those claiming fuel tax credits must register for GST.
GST Concessions for Small Business:
For business with an aggregated turnover of less than $10 million, several GST concessions are available making compliance more manageable.
When to Register and How to Stay Compliant:
If you already are trading as a business, Register for GST if you anticipate reaching $75,000 turnover. Registration must occur within 21 days of realising you will exceed the threshold. Registering for GST is optional if your business or enterprise doesn’t fit into one of these categories. If you choose to register, generally you must stay registered for at least 12 months. You can also cancel your GST registration if you no longer require to be registered.
ATO Red Flags for GST Compliance:
The ATO closely monitors various factors including turnover size, compliance history, lodgment patterns and financial record. BE vigilant about potential red flags to ensure seamless GST compliance. The following can be potential indicators to the ATO of something untoward:
- Size of turnover and GST Liability
- Noteable deviations from previous GST Lodgements
- Previous compliance history
- Repeated late lodgements, extension requests and late payments
- Retail industries and those with high volumes of cash transactions
- Property and other sectors involving large, complex transactions
- Financial records that deviate from industry norms
- Misalignment between Income Tax and GST records.
- The size and frequency of GST refunds
Stay compliant! If you have any queries, feel free to reach out below.
– Team BKSP