When does a small business need to register for GST?

Goods and services tax is one of the first tax questions a growing business faces. The Australian Taxation Office (ATO) is clear that not every business needs to register, but penalties may apply if you fail to register when you are required to.

When you must register

According to the ATO, you must register for GST:

• when your business has a GST turnover of $75,000 or more, which is the GST threshold

• when you start a new business and expect turnover to reach the threshold in the first year

• if you run a non-profit organisation with a GST turnover of $150,000 or more a year

• if you provide taxi or limousine travel for passengers, including ride-sourcing, regardless of turnover.

GST turnover is gross income from all your businesses, minus GST. The ATO has a guide to working it out.

Timing

Once you are required to register, you need to do it within 21 days. You only register once, even if you run more than one business.

You need an ABN first

Before registering for GST, you need an Australian Business Number. You can get one when you register your business name or later.

Keep an eye on the threshold

If your business is growing, check your turnover regularly rather than once a year. That way you register on time instead of discovering the obligation after the fact. You can also cancel your registration if you are no longer required to be registered.

This article is general information. Tax rules can change, so check the ATO website or speak with a registered tax agent about your situation.