What is GST and how does it work?
Not clear on your GST commitments? Don’t stress. It’s not as tricky as you might think. Here’s what to focus on.
1. Do you need to register for GST
Yes, if you expect yearly turnover to be over $60K.
Optional if yearly turnover is less than $60K.
(You can’t claim GST on expenses if you don’t register.)
2. Registering for GST
3. Adding GST to your prices
Old price x 1.15 = GST inclusive price
4. Issuing tax invoices
You need to be able to issue tax invoices (include those words), with extra details like:
- the seller’s name and GST number
- notes showing that GST has been charged
5. Recording GST
Keep a running tally of the GST you’ve collected on sales.
Do the same for the GST you’ve paid on purchases.
You’ll use these numbers to figure out your GST bill or refund at step 6.
*You will most likely collect more than you pay.
6. Preparing a GST return
Figure out your GST bill (or refund).
$2819.74 – $1342.87 = $1476.87 (Money you owe Inland Revenue.)
Now include this in your GST return and file it online with Inland Revenue.
Think of GST as money you’re collecting for Inland Revenue. Treat it as their money and you won’t get caught short.
7. GST due dates
Most small businesses file every two months. Your due date depends on when you first registered.
Make GST less taxing
Learn how software can help with GST invoicing, accounting, and filing.
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