So you’ve got an ABN, what’s next?

Summary

Congratulations on starting your business. It’s a fantastic milestone!

Now that you’ve got your ABN, there are a couple of other tax registrations to consider, namely GST, PAYG, WET and fuel tax credits.

In Detail

There is an endless list of things to consider when you start your business so we’ve pulled together this helpful guide to get your on the right path with your tax registrations.

ATO Business Portal

The first thing you’re going to want to do is get yourself set up on the ATO business portal (also referred to as online services for business).  From the business portal you can manage your tax registrations, see all lodgements that require your attention and keep your details updated with the ATO.

To access the ATO business portal you’ll need to set up a myGovID (separate from your myGov) and then link it to your business in Relationship Authorisation Manager (RAM).  You can find out how to do that here.

Register for Goods & Services Tax

You only need to register for GST when you meet the threshold.  Up until that point in time, you aren’t required to register but you can voluntarily register.

You are required to register for GST when your GST turnover is $75,000 or more.  Now here’s where it can get a bit tricky.  You need to assess your GST turnover on a monthly basis and you’ll exceed the thresholds if either:

• Your turnover for the current month plus the previous 11 months totals $75,000 or more; or
• Your turnover for the current month plus your projected turnover for the next 11 months is expected to be $75,000 or more.

Let’s use an example to try clear that up.  Steph has started a new business selling cosmetics.  Business is going well and after 4 months of trading Steph’s turnover is $10,000 (excluding GST) per month and she’s expecting to keep earning at least that amount for the next year.  Steph would be required to register for GST as her GST turnover on a projected basis is $120,000 ($10,000 for the current month plus $10,000 per month for the next 11 months) which is above the $75,000 threshold.

If you exceed the GST turnover threshold like Steph did, you’ll have 21 days to register for GST.

Once you’re registered for GST you’ll need to include GST on your sales to customers (with some exclusions for certain customers and products/services) and you may be able to claim GST on purchases you make.  This GST is reported to the ATO on a annual, quarterly or monthly basis via the Business Activity Statement (BAS).  We’d strongly suggest you seek assistance with preparing your BAS as it can be tricky to get your GST right.

Keep in mind that some industries (such as rideshare drivers) must be registered for GST regardless of turnover. 

If you’re not sure whether you should register for GST, just reach out and our team will be happy to assist.

Register for PAYG Withholding

If you’re planning to employ staff or need to withhold payment from contractors you’ll need to register for PAYG withholding.

PAYG withholding is the tax you withhold from your employee’s wages that gets reported and paid to the ATO via the BAS.  You need to register for PAYG withholding before you pay your employees even if your employees earn under the tax free threshold.

You may also need to register for Single Touch Payroll to report wages to the ATO each pay period.  Accounting software such as Xero has this functionality built in and can take care of this for you.

Wine Equalisation Tax (WET)

WET is specific to those that make, import or wholesale wine in Australia.  If that’s you, reach out to the team at Day One Advisory and we can get this sorted for you.

If you’re in the alcohol game, you’ll also want to consider your excise duty requirements.

Fuel Tax Credits (FTC)

FTC provide businesses with a credit for the fuel tax that’s included in the price of fuel that they use.  This can apply to machinery and other plant and equipment, heavy vehicles and some light vehicles that travel on private roads.  If you think this applies to you, reach out to the team at Day One Advisory and we can assist.

Other Considerations

We’ve only touched on the tax registrations above but there are plenty of others to consider such as registering a business name and trademark as well as any industry specific requirements.

We can help you get these registrations in place.  Hit the ‘Let’s Talk’ button below and we’ll get you set-up.

Disclaimer

This article has been prepared for informational and discussion purposes only.  This article is of a general nature and does not replace consultation with a qualified accountant.  This article should not be regarded as advice and Day One Advisory accepts no responsibility to any person who acts or relies in any way on this article.