New business owners often ask me - should I be registering for GST? I'm not earning over $60,000.
It depends on a few things, a good first question is:
do you sell business to business (B2B) or business to consumer (B2C)?
If you sell B2B it can often be worth registering, even before you earn over the $60k mark - because other businesses can claim the GST back, it doesn't make your prices higher. And you get to claim GST on all your expenses - petrol, purchases, office expenses, a portion of entertainment.
If you sell B2C you're going to be increasing the prices you're charging consumers or you will be pocketing less money - which can sometimes be a negative.
Of course there are more things to think about:
GST adds a little bit of admin, are you claiming enough to make it worth it?
Are you terrible with money and might end up in debt with the IRD rather than saving any money?
It's $60,000 in any 12-month period - not calendar or financial year.
Still not sure?
Come have a a chat with me at Varntige.
