Goods and services tax (GST) is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. Businesses collect GST on behalf of the government, produce a BAS (Business Activity Statement) at the end of a specified period (usually monthly or quarterly), then send the report and payment to the ATO by the specified due date. It is important to remember the GST you are collecting is not your money, it belongs to the ATO.
The tax you pay at the end of the financial year is is personal tax is owed to the Australian Tax Office. It is based on your earnings. After you have been in business for a year, the ATO will estimate how much personal tax you will owe at the end of the year. You will then need to pay this estimate each quarter through your BAS - it is known as PAYGI - pay as you go installments.
In short, if your business turns over $75,000 per year, you have to submit a BAS. You need to monitor your income over the year, and if you think your business is going to exceed the threshold, you need to register immediately. If you would like to know more about when to register for GST, click on the link below.
Ideally you need at least two bank accounts per business - an operating account, and a savings account. Transfer the GST portion of your sales into the savings account. You can choose to put extra aside as well if you like, to cover other expenses. How much you put aside depends on many things - business cash flow, the size of the business etc. When it comes time to complete your BAS, you have already put the money aside, alleviating much stress.
It isn't ideal. When there are a lot of personal transactions in an account, it can become confusing - they might see a personal expense as a business one, or a business expense as a personal one. The result is all of your reports do not accurately reflect what is happening in your business. Your BAS report could also be incorrect, causing you to be non-compliant in your GST responsibilities. There are also other implications regarding personal tax and superannuation, or if you are operating as a trust or a company. In short, it is best to keep your personal and business accounts completely separate.
That depends on many things - how many transactions you have, how well your records are kept, if there is any clean-up involved etc. To begin with you are put on an hourly rate to determine how long it will take. After a few months we will move to value pricing, so you can set up an automatic transfer and not have to think about it. The best way to determine what your needs are is to arrange a free 1/2 hour consultation.
There are a few basic things that you will still need to do:
* Provide source documents (receipts, bills, invoices, cheque stubs, bank statements).
* Review and approve reports
* Answer questions from your bookkeeper or accountant as they arise
* Be involved! The best way to know your business is to watch what is happening with your finances.