So, you have a nice little hobby business, it’s grown from nothing and you’re allowing yourself the thought that you’re doing well.
And then someone tells you that maybe you have to register for GST. And that sounds like it’s horribly complicated. It’s not.
Generally, the ATO requires you to register for GST when you expect that your annual turnover will exceed $75,000. The moment it seems likely that you’ll exceed $75,000 for that year, you should register for GST.
But it’s not terribly complicated. You’ll be required to start to issue tax invoices, and for most this will merely mean that you’ll have to modify your invoices to include the words “Tax Invoice”, your ABN and the GST shown as a separate amount. If you have a webstore, you’ll probably find that your software can already do it.
Secondly, you have to be more diligent with your accounting and record keeping, because it’s now important to record GST-free expenses (eg fresh food & wages) and GST-applicable expenses accordingly.
You shouldn’t have to fear this, as modern accounting systems like Xero are super-easy to use, are very affordable. Come talk to us to see how we can set you up.