GST Changes for Small Business: Compliance Checklist

This guide explains how recent GST changes affect small businesses in Australia and provides a practical compliance checklist to help you stay on top of your obligations. You’ll learn what’s changed, what you need to do, and how to avoid common pitfalls—whether you’re registered for GST or considering your options.

What You’ll Need

• Your ABN and GST registration details
• Access to your accounting software or records (invoices, receipts, bank statements)
• Your BAS (Business Activity Statement) lodgement schedule
• Details of your business income and expenses for the relevant period
• Any correspondence from the ATO about GST changes

Step-by-Step

1. Check your GST registration status. Confirm whether you are registered for GST. If your business has a GST turnover of $75,000 or more ($150,000 for non-profits), registration is mandatory. If you’re below the threshold, you can still choose to register voluntarily—but weigh the benefits (claiming credits) against the compliance burden.
2. Review the latest GST rate and rules. The GST rate remains 10% on most goods and services in Australia, but recent changes have focused on digital platforms, low-value imported goods, and non-resident suppliers. Make sure you understand which rules apply to your sales and purchases.
3. Update your invoicing and record-keeping. Ensure every tax invoice you issue shows the required details: ABN, GST amount, and a clear description. For purchases under $82.50 (including GST), a simpler invoice is acceptable. Keep all records for at least five years.
4. Adjust your accounting software settings. If you use software like Xero, MYOB, or QuickBooks, check that GST is applied correctly to your products and services. Update any tax codes that may have changed, and test a sample transaction to confirm the amounts are right.
5. Review your BAS preparation process. Your BAS must report GST collected on sales (GST on sales) and GST paid on purchases (GST on purchases). Recent changes may affect how you report transactions with overseas suppliers or digital platforms—make sure you’re using the correct labels.
6. Reconcile your GST accounts monthly. Before each BAS lodgement, reconcile your GST collected and paid against your accounting records. This helps catch errors early and avoids surprises.
7. Lodge your BAS on time. BAS lodgement is usually quarterly (or monthly if you’re on a monthly cycle). Late lodgement can result in penalties and interest, so set reminders and consider using a registered tax agent if you need extra time.
8. Monitor for further changes. GST rules can evolve—especially around digital economy transactions. Subscribe to ATO updates or consult a tax professional to stay informed.

Common Mistakes

• Forgetting to include GST in pricing. If you advertise a price without GST and you’re registered, you must either include GST in the displayed price or clearly state that GST is additional.
• Claiming GST credits without a valid tax invoice. You need a tax invoice from the supplier to claim a credit for purchases over $82.50 (including GST).
• Mixing up taxable and GST-free supplies. Some items (basic food, some medical services) are GST-free. Ensure you classify your sales correctly to avoid over- or under-reporting.
• Ignoring changes for digital sales. If you sell digital products or low-value imported goods, recent changes may require you to charge GST even if you’re not an Australian resident. Check if these rules apply to you.
• Not reconciling before lodging BAS. Relying on estimates or last-minute figures can lead to errors and potential audits.

Tips

• Use accounting software that automatically calculates GST on transactions—it reduces manual errors.
• Keep a separate bank account for GST collected, so you don’t accidentally spend it before BAS is due.
• Set aside a percentage of your income (e.g., 10%) in a savings buffer to cover GST liabilities.
• If you’re unsure about a specific transaction, check the ATO’s GST guidelines or ask a tax agent.
• Review your GST treatment of expenses like fuel, entertainment, and overseas purchases—these have special rules.

Troubleshooting

If you discover an error in a previously lodged BAS, you can usually correct it in your next BAS. If the error is significant or you’re concerned about penalties, contact the ATO early and explain the situation. They may allow you to amend a previous BAS or set up a payment plan. If you’re unsure whether a change applies to your business, seek professional advice before lodging.

Frequently Asked Questions

Do I need to register for GST if my turnover is below $75,000?

No, registration is voluntary below the threshold, but you may choose to register to claim GST credits on your purchases. Consider whether the extra paperwork is worth it for your situation.

What is the GST rate in Australia?

The GST rate is 10% on most goods and services. Some items are GST-free (e.g., basic food, some education and health services).

How do recent changes affect my online sales?

If you sell digital products or low-value goods to Australian consumers, you may need to charge GST even if you’re not an Australian resident. The ATO has specific rules for non-resident suppliers.

Can I claim GST credits on purchases from overseas?

Yes, if the purchase is for your business and you have a valid tax invoice. However, there are special rules for imported services and digital products—check with the ATO.

What happens if I lodge my BAS late?

You may face penalties and interest charges. The ATO can also issue a default assessment if you don’t lodge. If you’re struggling, contact the ATO to discuss options.

Do I need to keep records for GST?

Yes, you must keep all tax invoices, receipts, and other relevant records for five years. This includes digital records.

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