GST and the ATO

[dylan11235813]

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?

[lane-ends]

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

[dylan11235813]

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.

[dylan11235813]

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.

[bigbrickshop]

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.

[chameleon54]

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.

[shepherdsrule]

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@crowsman53 wrote:

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

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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.

[davewil1964]

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@shepherdsrule wrote:

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@crowsman53 wrote:

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

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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.

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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.

[cherry*135]

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@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.

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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/

[cherry*135]

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@shepherdsrule wrote:

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@crowsman53 wrote:

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

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

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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

[chameleon54]

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@am*3 wrote:

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

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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

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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.