{"id":4555,"date":"2019-01-23T16:22:59","date_gmt":"2019-01-23T05:22:59","guid":{"rendered":"https:\/\/edmunds.com.au\/?p=4555"},"modified":"2019-01-23T16:22:59","modified_gmt":"2019-01-23T05:22:59","slug":"small-business-accountant-explains-basics-of-gst","status":"publish","type":"post","link":"https:\/\/edmunds.com.au\/small-business-accountant-explains-basics-of-gst\/","title":{"rendered":"Small Business Accountant Explains GST For New Businesses"},"content":{"rendered":"

With a handful of exceptions, GST is charged on every single purchase we make.<\/span><\/p>\n

Of course, you\u2019ve only got experience with the customer side of the GST equation. Now that you\u2019re opening up your own small business however, it\u2019s important that you understand how the <\/span>business<\/span><\/i> side of GST works.<\/span><\/p>\n

It\u2019s crucial that you understand your obligations and duties vis-a-vis GST before you open your small business. Not only because it\u2019s a legal obligation, but because failing to meet your obligations could land your business in hot water with the ATO!<\/span><\/p>\n

So, where can you start?<\/span><\/p>\n

\"Piggy<\/p>\n

Collecting GST<\/span><\/h2>\n

All businesses collect GST – even the ones that aren\u2019t GST registered.<\/span><\/p>\n

Luckily for you, unless you do your bookkeeping and accounting by hand, you won\u2019t need to worry about filling out spreadsheets.<\/span><\/p>\n

Any bookkeeping or accounting software worth its salt will fill this in automatically and calculate the amount of GST you\u2019ve accrued for you.<\/span><\/p>\n

Accounting for GST collected<\/span><\/h3>\n

If you look at your accounting software, you might notice something strange. Specifically, that GST accrued is listed as a liability rather than an expense!<\/span><\/p>\n

That\u2019s because when you get down to it, any GST you collect is a debt (or \u201cliability\u201d in accountant-speak).<\/span><\/p>\n

While you may have collected it, it\u2019s not <\/span>your<\/span><\/i> money, it\u2019s the ATO\u2019s money – you\u2019re just holding it for them until tax time comes around.<\/span><\/p>\n

And when it <\/span>does<\/span><\/i> come around, you\u2019re obligated to pay that money to the ATO. Functionally, it\u2019s identical to a debt – hence, it\u2019s treated as one.<\/span><\/p>\n

<\/h3>\n

Are you a GST-registered business?<\/span><\/h3>\n

While every business collects GST, not all businesses are GST-registered.<\/span><\/p>\n

When we say GST-registered, we specifically mean businesses that:<\/span><\/p>\n