Do I need to register for Goods and Services Tax (GST)?

Starting a small business, or maybe your business has grown, and you’re wondering if you need to register for GST?  It is quite a simple process, and we can guide you through the decision process to determine if you need to register for Goods and Services Tax (GST) or not. 

You may not be required to when you first commence your business.  And if you don’t, you will need to keep an eye on your turnover, so you know when you do need to get registered.  Either way, you will need to have your bookkeeping in order so you can make some decision or complete your GST reporting.

Read the criteria below to determine if you need to get GST registered:

Bookkeeping for Small Business; Do I need to register for Goods and Services Tax (GST)?

Criteria for GST Registration:

  1. If the annual GST turnover of your business is above $75,000.00.
  2. Your business has already reached the annual threshold of $75,000.00.
  3. Annual GST turnover for a non-profit organisation (NGO) is above $150,000.00.
  4. If you expect your annual GST turnover to exceed the threshold.

If your business meets any of the criteria mentioned above, you must register for Goods and Services Tax (GST). But, if you do not met the above, then registration is optional for you. In addition, we suggest that you should check your income every month to see whether you fall under one of the criteria. For example, if your projected annual turnover reaches or crosses the threshold, you must immediately register within 21 days. Failure to comply will result in penalties, so bookkeeping for small business is really important.

Another point to know is that you can register for GST even if you do not meet the criterion. However, doing so will force you to charge GST and claim for the GST credits for your business transactions. Most business owners I know have the goal to reach at least $75,000, so we recommend going ahead and getting registered. Then you need a plan in place to meet compliance obligations.

How do you register for GST?

When doing bookkeeping for small business our clients’ most common follow-up question is the procedure for GST registration. While this may seem like a difficult task, the process is easy to follow.

First, the prerequisite for the Goods and Services Tax (GST) registration is the Australian Business Number (ABN). You will need to register for an ABN when you register your business. This can be done here.

Second, if you already have your ABN, then you can register for GST through one of the following ways:

  1. Register through the Online Services for Business section on the ATO official website.
  2. Register by dialling 132866 on your phone. A government employee will guide you throughout the process.
  3. You can also collect and fill up the NAT 2954 form on the ATO official website to register for GST.
  4. If you already have enlisted the aid of a registered tax agent or BAS agent, then they can help you register for GST.

Once you are successfully registered for GST, the ATO will provide all pertinent information of your GST and ABN (if you have not received it yet) in writing.

Consequences of not registering for GST

The third most common question that our clients ask us is whether they will face problems if they do not register right away. You do have three weeks to do the registration. So, this means you do not have to register “right away.” But, if you want to avoid registration totally, you should know the consequences of such actions.

Failure to register for the GST within the required timeframe will mean severe repercussions:

  1. You will be required to pay for GST on all sales from the day you were eligible and required to register for GST.
  2. You will be penalised (often high penalty units are charged) for your failure to submit a tax return or Business Activity Statement (BAS) on time.
  3. Penalties are not tax deductible.
  4. You will have around 14 days to pay the fines once you receive the ATO notice in writing.

Failure to adhere to the instructions will result in further severe penalties. The money for the payment of these penalties will come out from your business. Why would anyone want to incur such losses? We suggest you let us handle everything for you. So, you can concentrate your precious time on growing your business while we take care of your bookkeeping for small business requirements.

Things to do after GST registration

Clients, who have registered for GST through us, often inquire about the other things they need to do to keep up with the registration. Yes, there are specific guidelines you must follow strictly.

For example, suppose your annual business turnover is less than $20 million. In such a case, you will have to file a Business Activity Statement (BAS) every quarter unless told otherwise by the Australian Tax Office (ATO). The four quarters of BAS are July to September (Quarter – 1), October to December (Quarter – 2), January to March (Quarter – 3), and April to June (Quarter – 4). You will have four weeks after a quarter ends to lodge your BAS. As mentioned earlier, severe fines are levied by ATO if you do not file the statement on time.

As you can voluntarily register for GST even if you do not meet the criterion, you can also willingly file BAS on a monthly basis. But, doing so will incur you additional fees.    

If these steps are too complex to follow, we specialise in Bookkeeping for small businesses, so reach out and ask for your free consultation. We ensure all necessary documents and statements are filed on time so that our clients are not subjected to any unwanted financial or legal issues.

Things you should do if you do not need to register for Goods and Services Tax

Not all our clients are required to register for Goods and Services Tax, especially if they do not fit the bill. Yet, there are still things they should accomplish even if they are not registered for GST. So what is the list of things to do?

While you will not be required to file any BAS, you will need to report your annual income and expenses in the Tax Returns to the ATO. As such, it means you will be required to maintain your records of financial transactions stringently. If you are not fond of doing hours of mathematics and accounting, it will be a wise choice to hire professional help to get you through it. In this case, you will have more time and energy to provide more attention to your business, and the experienced bookkeeper will maintain your records. This saves a lot of your time too.

Bookkeeping for small businesses

Bookkeeping for small businesses can be a tedious job. It takes time away from you to do other things required in your business, or sometimes it takes your family time away. Perth Bookkeeping Professionals provide all the necessary services that a business may need. We understand that not all businesses have a sufficient budget to hire professional help. Thus, we also have customisable packages to meet our clients’ needs. For us, clients are family.