Set your franchise up for success
Are you starting a new franchise or busy being a boss running one? Check out our GST and BAS essentials (and extra tips) to help you stay on top of your tax obligations, including:
- using digital tools and software that can help you automate your business administration and streamline your operations (for example, some tools can separate the GST component when you make a sale and transfer it directly to the ATO)
- setting aside GST, pay as you go withholding and super from your cash flow, so you have the funds available when it’s time to pay
- managing your cash flow, so you know when you may expect money to come in and go out
- keeping complete and accurate records and updating them regularly.
A registered tax professional can also help you consider what may work for your business.
You can find more free resources to help you get it right at ato.gov.au/CashFlowTips.
When to register for GST
If you’re running your franchise and it’s doing well – or even booming, well done!
You’ll need to register for GST if your GST turnover from your franchise’s activities is $75,000 or more in a 12-month period.
TIP: Check each month to see if you’re reaching the GST threshold of $75,000 or you’re likely to exceed it.
When working out your GST turnover to see if you meet the threshold, include both your taxable and GST-free sales. Don’t forget to also include the value of any non-monetary payments (such as products, services, and gifts) that you may receive.
Before you register for GST, you’ll need to have an Australian business number (ABN).
TIP: You can register for GST at the same time you register for an ABN.
If you already have an ABN, you can register for GST via Online services for business or through your registered tax or BAS agent.
You only need to register for GST once, even if you run multiple businesses.
When you’ve registered for GST, you must:
- include 10% GST in the price you charge for your goods and services sold in Australia – unless they’re GST-free or input taxed
- collect GST on your taxable sales and report and pay it to us by lodging your business activity statement (BAS).
Find out more at ato.gov.au/registerforGST.
Claiming GST credits
Once you’ve registered for GST, you can claim GST credits for GST included in the price of purchases you make to use in your franchise when you lodge your BAS.
GST credits offset against the amount of GST you need to pay. This means you may be entitled to a refund if your GST credits are greater than the GST you owe.
You can claim GST credits if you:
- intend to use your purchase solely or partly for your franchise and it does not relate to making input-taxed supplies
- make a purchase and its price includes GST
- provide or are liable to provide payment for the item you purchased
- have a tax invoice from your supplier (for purchases more than A$82.50).
TIP: If the tax invoice doesn’t specify the amount of GST included in the price of your purchase, you can work out the GST amount by dividing the price by 11. This will give you the amount of GST credit you can claim.
Remember, if you make purchases that you use both for business and private purposes, you can only claim a GST credit for the business portion you use.
For example, if 60% of your use of the purchased item is for business purposes, you can claim a credit of 60% of the GST you paid.
TIP: Don’t forget to claim your GST credits within the 4-year time limit.
Find out more at ato.gov.au/claimGSTcredits.
Lodging your BAS
To report and pay your GST and other taxes, and claim GST credits, you’ll need to lodge your BAS. We’ll automatically issue you a BAS when it’s time to lodge.
Lodging online is quick, easy and secure. Plus, you may receive an extra two weeks to lodge and pay. You may also get extra time if you lodge through a registered tax or BAS agent.
TIP: Even if you have nothing to report in your BAS (for example, you’ve paused your business), you still need to lodge your BAS as ‘nil’ by the due date.
If you’ve been making ‘nil’ BAS lodgments for a while, you may need to cancel your GST and other registrations. Read on to find out more about cancelling your GST registration.
If you already lodge your BAS online but still receive paper BAS, update your ATO communication preferences from ‘paper’ to ‘online’. This will allow you to receive correspondence more quickly from us, receive less paper and save the time it takes to file these documents.
Find out more at ato.gov.au/lodgeBAS.
Lodge and pay on time
It’s important to lodge and pay your BAS in full and on time to avoid penalties, interest charges and firmer actions.
If the due date is on a weekend or public holiday, you have until the next business day to lodge and pay.
TIP: You can set calendar reminders on your phone for BAS lodgment key dates by using the features in our ATO app.
If you lodge your own quarterly BAS, your BAS is due:
- 28 October (for the July, August and September quarter)
- 28 February (for the October, November and December quarter)
- 28 April (for the January, February and March quarter)
- 28 July (for the April, May and June quarter).
You may get an extra two weeks to lodge and pay if you lodge your quarterly BAS online.
If you lodge your BAS monthly, it is due on the 21st day of the following month.
Find out more at ato.gov.au/BASduedates.
How to pay
We offer different options to pay so you can find one that best suits your franchise. The quickest way to pay is with BPAY or through our online services.
Paying electronically is secure and saves you time and is processed on your account faster.
For a full list of payment options, visit ato.gov.au/howtopay.
If you can’t pay on time
Paying in full and on time can save you money over time by helping you avoid unnecessary general interest charges.
If you can’t pay on time, reach out to us early, you may be able to set up a payment plan that can help you stay on top of your tax obligations.
You can also speak with your registered tax agent who can contact us on your behalf.
TIP: Set aside GST, pay as you go withholding and super from your cash flow, so you have the funds available to pay in full and on time.
Find out more at ato.gov.au/paymentplans.
When to cancel your GST registration
You must cancel your GST registration and other registrations (including your ABN) if you’re:
- selling or closing your franchise
- changing your franchise business structure – this includes changing from a partnership to a company, unless the old business carries on another business.
TIP: Cancel your GST registration and other registrations all at the same time via Online services for business or through your registered tax or BAS agent.
You’ll no longer receive BAS for GST after you cancel your GST registration.
Make sure you’ve met all your tax and super lodgment, reporting and payment obligations before you cancel your registrations.
Find out more at ato.gov.au/cancelGSTregistration.
Need more information
We have extra tips to help you prepare and lodge your BAS and get your GST obligations right, visit ato.gov.au/BAStips.
About the author
Darryl McCarthy is the ATO’s Assistant Commissioner for the GST Program. With over 30 years’ experience in the public service, he’s a versatile, connected and energetic executive. He leads governance and assurance for the GST product, working with all stakeholders to fulfil the ATO’s GST administrative performance commitments to states and territories. Darryl is committed to helping Australian businesses understand their GST obligations, so they can get it right from the start.