topic Re: GST and the ATO in Selling

GST and the ATO

dylan11235813 — Tue, 10 Jun 2014 06:25:48 GMT

There is a $75,000 limit for when a seller needs to register for GST with the ATO. Is this $75,000 figure based on the total of the sale price (item + postage + packaging + handling). or can the total sales price by adjusted to only include the item price?

Re: GST and the ATO

crowsman53 — Tue, 10 Jun 2014 06:45:13 GMT

I dont think so. I do know GST can be a problem, Your postage, Packaging and any other expenses you must hold receipts so when you buy your envelopes, bubblewrap, tape etc make sure you keep your receipt. Now FVF on eBay for item sold including postage they DO NOT include an ABN Number.. so that is a no go.. I have read somewhere when you lodge an item with AP they can supply a recipte but they do not give a receipt with tracking from C&S for parcel post. So I would be very careful... GST almost cost me my house and assets 5 years ago

Re: GST and the ATO

dylan11235813 — Tue, 10 Jun 2014 07:12:44 GMT

Thanks. I have read about the GST credit thing and I do keep all receipts for tax anyway. I was just wondering when it comes time to actually register for GST.

With the $75,000 limit. Say when comparing a B&M store and online store with the exact same sales volume (same number of items sold and item price). The online store would need to register for GST earlier because they have more money comming in as a result of needing to post items?

Re: GST and the ATO

jensmanchester-australia — Tue, 10 Jun 2014 07:40:44 GMT

The figure of $75,000 is on total turnover which includes sales price, postage costs etc.

Re: GST and the ATO

crowsman53 — Tue, 10 Jun 2014 08:03:55 GMT

But You Must Have Receipts eBay Do Not Supply An ABN.

Re: GST and the ATO

putney32 — Tue, 10 Jun 2014 09:28:00 GMT

@crowsman53 wrote:
But You Must Have Receipts eBay Do Not Supply An ABN.

ebay dont need to supply an ABN. eBay do NOT issue tax invoices and do not collect GST as they are a Swiss Rgistered company

Re: GST and the ATO

rhysy87 — Tue, 10 Jun 2014 10:04:57 GMT

is that $75,000 per year or just $75,000 straight up?

Re: GST and the ATO

jensmanchester-australia — Tue, 10 Jun 2014 10:30:12 GMT

It is $75000 within any 12 month period.

Re: GST and the ATO

jensmanchester-australia — Tue, 10 Jun 2014 10:33:41 GMT

Receipts are nothing to do with turnover. Turnover is income. Receipts are for the expenses you claim against income

Re: GST and the ATO

cherry*135 — Tue, 10 Jun 2014 13:25:37 GMT

Your annual turnover includes all ordinary income you earned in the ordinary course of business for the income year. Turnover means your gross income, not your net profit.

ATO

Re: GST and the ATO

lane-ends — Wed, 11 Jun 2014 05:21:31 GMT

Turnover, is total money received.

One issue with the $75000, knowing if this is likely to happen. eg you have a better year than you thought you would. You could easily turnover that figure but not be previously registered and hence having the documents or having filled out a BAS.

Then that figure may be a one off, so is not a requiremnt the next year.

So that begs the question how strict is the compliance reqiuirement for that threshold?

I used to be registered when I also had a B & M. Eventually admitted I wasn't going to reach that threshold in the near future, so cancelled it as I couldb't see the point writing a quarterly cheque to ATO, given that i couldn't collect anymore to compensate. It ends up being a straight 10% tax on our profits

Re: GST and the ATO

dylan11235813 — Wed, 11 Jun 2014 05:24:12 GMT

Thanks everyone.

I was thinking that maybe some expenses could be used to offset the $75,000 turnover limit. Things that GST has already been payed on for example.

Re: GST and the ATO

dylan11235813 — Wed, 11 Jun 2014 05:30:59 GMT

I think when using the $75000 limit it needs to be calculated per quarter or month (It does say on the ATO site somewhere) and definately not over the entire year. To actually have to register that is.

Re: GST and the ATO

bigbrickshop — Wed, 11 Jun 2014 05:51:21 GMT

Sometimes it is worth it to register for the GST even if you are under the $75,000 threshold.

If you sell to businesses it may increase your sales as they prefer to buy from sellers who can issue a Tax Invoice so that they can claim the GST back. And if you buy all your stock in Aus you can claim back the GST paid on it as well as any GST included in your packaging, postage, other expenses. You should speak to your accountant or tax advisor to work out whether you need to or choose to apply for GST.

Re: GST and the ATO

chameleon54 — Wed, 11 Jun 2014 08:52:12 GMT

I have given very detailed explanations on how to legally avoid registering for GST with ebay sales well over $75,000 on the tax thread on Australia seller release 14.1 forum. I wont repeat it all here as it is spaced over several posts that took quite awhile to write. I have used this strategy myself under the guidance of my accountant and have lodged annual returns with the ATO under this system without problems. I,m happy to assist with advice if anyone wishes to use the system.

Re: GST and the ATO

shepherdsrule — Wed, 11 Jun 2014 10:40:56 GMT

@crowsman53 wrote:
But You Must Have Receipts eBay Do Not Supply An ABN.

No company supplies an ABN or ACN - you need to apply for one.

dylan - the 75K is net profit - which is the amount you have earned after all costs are calculated and deducted.

If you do not have an ABN you only need to declare the income (as income) in your individual taxation declaration.

If you decide to register as a business (get an ABN/ACN) you can do so and you have the choice to register for gst at that time.

If you are not registered for gst, you can not charge gst, and and the business income will be calculated as sole trader income

at tax time.

If you think you are going to exceed the limit it would be best to get the advice of a business consultant and/or accountant.

Re: GST and the ATO

davewil1964 — Wed, 11 Jun 2014 11:29:38 GMT

@shepherdsrule wrote:
@crowsman53 wrote:
But You Must Have Receipts eBay Do Not Supply An ABN.
No company supplies an ABN or ACN - you need to apply for one.

dylan - the 75K is net profit - which is the amount you have earned after all costs are calculated and deducted.

If you do not have an ABN you only need to declare the income (as income) in your individual taxation declaration.

If you decide to register as a business (get an ABN/ACN) you can do so and you have the choice to register for gst at that time.
If you are not registered for gst, you can not charge gst, and and the business income will be calculated as sole trader income
at tax time.

If you think you are going to exceed the limit it would be best to get the advice of a business consultant and/or accountant.

Please don't talk about things you don't understand.

Turnover is turnover. The gross takings. Nothing to do with expenses or profit.

ALL entities that have an ABN or ACN are required to quote those when appropriate. Selling in this instance.

Gottabecareful, indeed.

Re: GST and the ATO

cherry*135 — Wed, 11 Jun 2014 11:52:16 GMT

@dylan11235813 wrote:
I think when using the $75000 limit it needs to be calculated per quarter or month (It does say on the ATO site somewhere) and definately not over the entire year. To actually have to register that is.

If you are not registered for GST, check each month to see whether you have reached the GST turnover threshold. You must register within 21 days of reaching the threshold.

If your current GST turnover reaches or is more than the GST turnover threshold but you satisfy us that your projected GST turnover will be below the threshold, you do not have to register for GST.

If you do not register for GST and you are required to do so, you may have to pay GST on the sales you have made since the date you became required to register – even if you did not include GST in the price of those sales. Not only will you be out of pocket for the amount of GST, but you may have to pay penalties and interest.

https://www.ato.gov.au/Business/GST/Registering-for-GST/Working-out-your-GST-turnover/

Re: GST and the ATO

cherry*135 — Wed, 11 Jun 2014 11:56:15 GMT

@shepherdsrule wrote:
@crowsman53 wrote:
But You Must Have Receipts eBay Do Not Supply An ABN.

dylan - the 75K is net profit - which is the amount you have earned after all costs are calculated and deducted.

No, it isn't.. that is very misleading.

As I posted above:

Your annual turnover includes all ordinary income you earned in the ordinary course of business for the income year. Turnover means your gross income, not your net profit.

ATO

Re: GST and the ATO

chameleon54 — Wed, 11 Jun 2014 22:51:20 GMT

@am*3 wrote:

dylan - the 75K is net profit - which is the amount you have earned after all costs are calculated and deducted.
No, it isn't.. that is very misleading.
As I posted above:
Your annual turnover includes all ordinary income you earned in the ordinary course of business for the income year. Turnover means your gross income, not your net profit.

ATO

am*3.......... is definately right about this. It is very important that sellers keep track of TOTAL SALES incl. postage cost and notify the ATO when they sell $75,000 in ANY 12 MONTH PERIOD ( not financial year ), as there is not really a lot of leigh way with this one. If your annual return shows you where above the limit the computer systems will automatically flag your account and you will have to register for GST purposes, pay back dated GST, ( and maybe extra penalties ) and your accounts will come to the ATO's attention for possible audit. I would imagine this would be a very stressfull experience.