GST Simplified
Everyone pays GST
Answers you need to think about
One of the few exceptions to when GST is not included in the selling price is when a business is not registered for GST. Businesses that have an income turnover of less than $75,000 do not need to register for GST. The only transaction that escapes GST is when a good or service is provided by an unregistered business or individual.
Prior to July 1, 2015 there were four methods of calculating and claiming motor vehicle expenses for both individuals and businesses. From July 1, 2016 the 12% of original value method and the one third of actual cost method can no longer be used.
GST is an exclusive system
Unless a good or service is specifically excluded under the GST legislation a GST registered business must include it in the price charged. The two categories of goods and services that don’t have GST included are GST Free, and Input Taxed goods and services.
When must you register for GST
All businesses that earn more than $75,000 a year in income, and charities that earn more than $150,000 in income a year, must register for GST. The only time you can choose to register for GST is when your businesses earns income of less than$75,000. When a business becomes aware that its turnover is more than $75,000 a year it must register for GST within 21 days.
If you want to learn when a business should register for GST if they have income of less than $75,000, contact us.
Most businesses do not effectively pay GST
There are only three types of GST goods and services
The three types of GST goods and services are GST taxed, GST Free and Input taxed. If something is not classed as GST Free or Input Taxed it should include GST. GST Free goods and services tend to be the necessities of life such as unprocessed food, essential medical and health services and education. They also include goods and services that are exported. Input Taxed goods and services include financial services, such as bank interest and charges, and residential rent.
It does not matter how you operate your business
Who can claim GST as a refund is the main difference
Do not worry if you make a mistake
How to register for GST
There are three ways in which registration can be made. The first is to complete an application form and mail it to the address shown in the instruction booklet that accompanies the registration application. The second is to have TaxBiz Australia complete and lodge the application for you. The last option is to register via the Internet at www.business.gov.au and complete the registration on line.
If you run a business and are worried at all about what you need to be doing with regard to GST, or you are not getting proactive advice from your current accountant, contact us
