Registering for GST

Businesses need to register for GST once they earn more than $60,000 in 12 months. Penalties may be enforced if businesses do not register when they are required.

This applies to all business structures including sole traders, contractors, those in a partnership and companies.

Although business owners need not register if they do not think they will turnover that much, voluntary registration means you may be able to claim a GST refund. Once you register, you must complete regular GST returns.

When registering, you must decide on how often you will file returns, i.e., monthly, two-monthly or six-monthly. You will also need to choose an accounting basis from the following options:

  1. Payments basis – you account for GST in the period you file returns in which you have made or received a payment.
  2. Invoice – you account for GST in the period you file returns when you have sent or received an invoice.
  3. Hybrid method – a combination of both payment and invoice methods.

After you have registered for GST, you will need to include GST in your prices, or you could be out of pocket.

Be sure to keep records of all your invoices and expense receipts (and keep these records for seven years). Any GST payments you receive should be put aside to pay Inland Revenue at return time.

Posted on 25 May '18 by , under tax.