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Be Aware of your GST Liability

If your small business is registered for GST, you will have been collecting GST from your customers via your tax invoices to your customers. GST is calculated as 10 per cent of the value of the supplied goods or services.

The GST you’ve been collecting needs to be paid to the ATO on a monthly, quarterly or annual basis – how frequently you pay depends on how frequently you are required to lodge your business activity statement (BAS).

When it comes to cash flow, GST is an outgoing that still sometimes manages to catch small business owners on the hop.

There are a few ways you can make your regular GST liability easier to manage. Some business owners open a separate bank account just for GST. When a payment is received, they transfer the GST component straight into their ‘GST’ bank account, thereby keeping the money they owe the ATO entirely separate to the money they’ve earned from the supply of their product or service.

Another way to incorporate efficiencies into your GST collection procedures is to utilise one of the business accounting software packages that are available. Accounting software such as MYOB or Xero can produce tax invoices and automatically generate reports of your GST liabilities and credits at BAS time.

Click here to learn more about how to make your BAS reporting and GST payments less taxing.

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