Home – New Forums Money matters Getting close to the GST threshold

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  • #978227
    Camman
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    Evening All,
    Looks like i’m in a predicament I never expected and that is I may potentially earn to much money this financial year.
    I’m not GST registered (though was planning on doing so in July) and had predicted to earn around the 60k (gross) mark this financial year.
    Due to primarily more demand for my services in the last month and a few jobs that have had large outlays (i.e. contract staff) if things keep going like they are i’ll hit the 75k mark around the second week of June.

    The question is of course can someone confirm GST registration is mandatory at 75K gross not net?

    If i register for GST now does that indeed mean I have to immediately pay 10% of current earnings i.e. take an extra 7k whack of tax or do I only have to pay get on the money I have yet to earn? Can exceptions be sought?

    Could I use my fiancés ABN for the remaining month? Would I have to use her name on the invoice as my name is my brand?

    Any other suggestions other than taking a two week holiday of course as unfortunately that would leave several companies I provide services for in a major bind.

    Many Thanks

    #1105554
    Anonymous
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    Hi Camman,

    Welcome to the forum, and apologies that your first post got stuck in our moderation queue for a little while.

    It’s here now though, so I’m hoping some of our resident bean-counting gurus will pop by shortly with some advice for you.

    All the best, and congratulations on the success of your new business so far.

    Jayne

    #1105555
    TehCamel
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    you only pay GST on revenue you earned while you were registered for GST.

    If I understand this correctly anyway. (I’m not an accountant or tax professional, take it with a grain of salt)

    comes down to “cash” based accounting or Accrual
    If you use cash based, you only record GST requirements from when you actually get the cash – IE, when your invoice is paid
    if you use accrual basis, you record GST requirements from when you invoice

    and you only pay it on the income you earn while you’re registered for GST..

    #1105556
    ABC
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    I am completely GST illiterate but found this on ato.gov.au

    http://www.ato.gov.au/businesses/content.aspx?menuid=0&doc=/content/00221985.htm&page=4#P129_6794

    Good luck

    #1105557
    Past-Member
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    Further to ABC’s post … extract from that page on the ATO …

    If you are not registered for GST, you must check each month to see whether you have reached the GST turnover threshold. You must register within 21 days of reaching the threshold.
    You reach the GST turnover threshold if either:
    your turnover for the current month and the previous 11 months is $75,000 ($150,000 for non-profit organisations) or more (current GST turnover), or
    your turnover for the current month and the next 11 months is likely to be $75,000 ($150,000 for non-profit organisations) or more (projected GST turnover).

    That means you should be ok if you register by the end of June if it’s within 3 weeks of gross turnover being $75,000 for the previous 11 months.

    Would be a good idea to check with your accountant or phone the ATO to double-check.

    .

    #1105558
    Camman
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    Fantastic, thanks very much for your help guys.
    I rang the ATO to double check everything above and yes it is 21 days from the month I make over $75000 Gross.
    For anyone else interested its $75000 in the previous 11 months with no corelation to financial or annual year.
    Also much to my relief I dont immediatly have to pay 10% of my previous years earnings once I hit that limit.
    Thanks again!

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