In his latest business banking column our CFO Greg Taylor looks at the GST. It looks like an increase in the rate isn't on the cards but Greg looks at what you need to do to meet your GST obligations.
The Goods and Services Tax (GST) has been in the news lately with several people, including the Western Australian premier, calling for the tax to be raised from its current rate of 10 per cent.
The new Prime Minister, Tony Abbott, had ruled out increases to the GST before the election.
It has been more than 13 years since the GST was introduced. It is a broad-based (or consumption) tax on the sale of most goods and services in Australia.
You must register for GST if your business has a GST turnover of $75,000 or more ($150,000 or more for non-profit organisations). If you are a taxi driver you must register for GST regardless of your turnover. If you're registered for GST, you may claim input tax credits for the GST paid on items you've bought as part of running your business. You need an Australian Business Number (ABN) to register for GST.
The GST means your business needs to be a tax collector and a good record keeper. Through your Business Activity Statement (BAS) you pay the Tax Office the difference between GST you have collected on its behalf less any GST you paid on inputs (so the GST isn’t double counted).
There are some concessions for small businesses (turnover less than $2 million). You can account for GST on a cash basis. This allows you to account for GST in the same tax period you receive payments from your customers and claim input tax credits for making payments to your suppliers. You can also pay in quarterly instalments.
The National Disability Insurance Scheme (Disability Care) has kicked off in the Hunter. If your business supplies disability supports to scheme participants you need to check if those supplies are GST free. Ask your accountant or the Tax Office.
Remember monthly BAS statements are due October 21. If you submit a BAS quarterly the due date is October 28.
This post is based on Greg’s weekly column in the Newcastle and Lake Macquarie Post.