Home – New Forums Starting your journey GST question for a now-and-then “second” income

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  • #970767
    mediaman
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    Hi there.

    A couple of questions re GST obligations for an ultra-small setup.

    If I decide to start making some money on the side in addition to my full-time job but do not expect to make a lot from doing it, working ionly now and then; and say I call it simply “John Smith” for my invoicing (not my real name – lol), then

    (1) Do I have to apply for an ABN and concern myself with GST?

    (2) And if I do not concern myself with GST, how will big companies I work for handle me not charging GST on my “invoices”?

    (3) If I do not charge them GST on the invoice but they do actually pay it on top of what I have charged, how do I handle the GST they have paid if I do not collect GST?

    (4) Is it still relevant that you do not really have to concern yourself with GST unless you are earning over $75k a year?

    Thanks in advance for any advice.

    MM

    #1045996
    ray_223
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    Hi MediaMan,

    MediaMan, post: 56147 wrote:
    (1) Do I have to apply for an ABN and concern myself with GST?

    Your ABN and GST are 2 unrelated concepts.
    You should apply for an ABN – I doubt anyone would do business with you if you don’t have an ABN. I assume at this stage a sole trader entity is what you would use and either trade under your own name or register a business name (i.e. MediaMan).
    GST is optional for those businesses earning below $75K.

    MediaMan, post: 56147 wrote:
    (2) And if I do not concern myself with GST, how will big companies I work for handle me not charging GST on my “invoices”?

    Obviously if you don’t charge GST they will know your turnover is below $75K and it “may” have a negative impression depending on who your target market is. If you think it would be an issue just register for GST – do a little paper work each quarter and it won’t be an issue!

    MediaMan, post: 56147 wrote:
    (3) If I do not charge them GST on the invoice but they do actually pay it on top of what I have charged, how do I handle the GST they have paid if I do not collect GST?

    That’s illegal – don’t do that. Refund the GST portion if someone mistakingly pays it. If you aren’t registered for GST you aren’t entitled to collect GST.

    MediaMan, post: 56147 wrote:
    (4) Is it still relevant that you do not really have to concern yourself with GST unless you are earning over $75k a year?

    I’m not 100% sure what you are asking here – as I said before registering for GST is optional if your income is under $75K. In some cases it’s a benefit not to register and other cases it’s best to register depending on your own circumstances and the market you are in.

    Good luck

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