As 2026 has just begun, many business owners are finalising their plans for the new year. It’s also a good time to consider whether your GST registration status needs to change. Whether you’re a seasoned entrepreneur or running a growing small business, understanding your GST obligations can save you from costly penalties and help optimise your cash flow.
What is GST registration?
GST registration means signing your business up with the ATO to collect and pay Australia’s 10% goods and services tax. When registered, you charge an extra 10% on most sales (one-eleventh of the GST-inclusive price) and periodically send this amount to the government. You can also claim back the GST you pay on business purchases through GST credits. If you’re not registered, you don’t add GST to your prices but you also can’t claim GST credits on your expenses.
When must you register?
You must register for GST if your business’s annual turnover reaches $75,000 or more. For non-profit organisations, this threshold increases to $150,000. You’re also required to register regardless of turnover if you drive a taxi, limousine or ride-share vehicle, or if you want to claim fuel tax credits. If you start a new business and expect to reach the $75,000 turnover in the first year, you should register from the outset. The key rule to remember is that you must register within 21 days of your turnover exceeding the threshold. Failing to register when required can result in penalties and having to pay GST retrospectively.
Should you register voluntarily?
If your turnover sits below $75,000, GST registration becomes optional. Many small businesses choose not to register, keeping their prices straightforward and reducing paperwork. However, voluntary registration can make sense in certain situations: if you sell mainly to other GST-registered businesses, your clients can claim credits on the GST you charge them; you can claim back GST on business purchases, which helps if you spend significantly on supplies or equipment; and it can add credibility in business-to-business dealings.
When should you cancel your registration?
If you’re already GST-registered, you might consider cancelling in these scenarios: you sell or close your business; you change your business structure (the old entity must cancel within 21 days); or your turnover has dropped below $75,000 and is likely to stay low. Remember, there are exceptions. Taxi and ride-share drivers must stay registered regardless of income levels.
Practical implications to consider
Being GST-registered affects your business operations in several ways. You’ll need to include 10% GST in your prices and set aside this amount for the ATO. You must lodge a Business Activity Statement (BAS) quarterly and issue tax invoices for sales over $82.50 that clearly show the GST component. If you’re not registered, you don’t charge GST, but you bear the full cost of GST on your purchases since you can’t claim it back.
Planning for 2026
Now’s a perfect time to evaluate your GST status. Review your 2025 sales and 2026 projections. Will you exceed the $75,000 threshold, or has your business shrunk below it? Consider any business changes planned for the new year, as new ventures, closures or restructures can trigger the need to update your GST registration status.
Take action now
GST registration decisions shouldn’t be made in isolation. The rules are complex, and the wrong choice can be costly. We can provide tailored guidance on whether to register or deregister, help with the paperwork and ensure you understand all the consequences. Contact us to discuss your specific circumstances and set your business up for compliance and optimal financial outcomes in 2026.
