Tax and GST Explained
The Spotz Guide for Sellers
Tax and GST Explained
We all know the old expression about death and taxes – they’re unavoidable. Except now for Australian vendors and shoppers, this might not always be the case! This short guide will give you an outline on what the GST is, where it’s applied, and how you might be able to find some savings!
The GST, Explained:
The General Sales Tax (‘GST’) is the tax you’ll see applied to most goods and services sold within Australia, or by Australian online vendors. Certain items are exempt from GST taxation, however! Most basic food items, such as those that require preparation or are basic staples, are exempt from the GST. Additionally, education costs, medical expenses and childcare services are examples of other things that are GST-exempt by the Australian Tax Office (‘ATO’).
For business owners and trade professionals that do more than $75,000 in business in a given financial year, the ATO requires that you register for GST, to track the amount of tax revenue that you gather. For businesses under this threshold, the government has decided that it’s sufficient for small business owners to track this amount informally, and self-report a summative amount at the end of each financial year. However, as businesses’ revenue grows, so does their responsibility for tax reporting – a necessary part of managing a successful business.
This is why when you sell with Spotz, you’ll notice that we take 10% in GST from the sale – this is required by Australian law because as an intermediary marketplace, we are seen merely as a business providing a service, even though we are a market for individual sellers. But not all is lost here! You can actually recover this sum from the Australian government by registering for GST, following which you’ll receive the GST amount that was put aside by Spotz – ensuring that your business receives the maximum amount of revenue possible. This is yet another reason to track all of your receipts, particularly those through our platform – imagine what your business can do by recovering fully 10% of its sales! Don’t let this regulatory hurdle cost you – instead, register for GST regardless of your business’ size, and collect 100% of your earned revenue.
- Register your business for GST as early as possible, to collect the maximum amount of GST back into your coffers – every bit counts!
- Once registered for GST, the tax you collect on sales can be reported on a BAS – a Business Activity Statement, which can be found through your account on the ATO Website.
- Remember that if you have claimed an income tax deduction for something you bought for your business, that you can only claim the original amount BEFORE GST was applied – otherwise you would be ‘double-dipping’ on tax benefits!
- For sales through Spotz, we recommend saving your sales receipts in a separate e-mail folder, so that they can be organised conveniently in one place.