GST Concessions: Who Qualifies and What You Get
Learn if your small business qualifies for GST concessions and understand how it affects your ability to claim back expenses.
GST concessions are rules that allow certain small businesses to operate without charging Goods and Services Tax on their services.
Who it's for
This scheme is specifically designed for small businesses that have a total turnover of less than $75k. If your business earnings fall below this specific threshold, you may not be required to charge GST on the services you provide to your clients.
What you get
The primary benefit of this concession is an exemption from charging GST on your services. This can make your pricing more competitive for your customers, as the total cost they pay for your services will not include the additional tax component.
What it costs you
While there is no direct fee to access this concession, it requires active management of your business finances. You must monitor your turnover very closely to ensure you do not accidentally exceed the threshold, as exceeding the limit will change your obligations.
The catch to know
There is a significant trade-off to consider regarding your business expenses. If you do not register for GST, you cannot claim back the GST that you pay on your own gear purchases and equipment. This means the tax you pay when buying tools for your business becomes a permanent cost to you rather than something you can recover.
How to apply
- Track your total business turnover consistently throughout the year.
- Monitor your earnings closely to see if you are approaching the $75k threshold.
- Decide if the benefit of not charging GST outweighs the loss of being able to claim back GST on your equipment and gear.
- Visit the official Australian Taxation Office portal for more information.