The GST I collect isn’t mine. How do I stop spending it before my BAS?
GST you collect belongs to the ATO until you lodge your BAS and pay it. Move it into a separate account every time a customer pays, along with the PAYG you withhold from wages, so your balance shows only what is yours. You must register for GST once your turnover reaches $75,000.
Why a good balance can mislead you
Every invoice with GST on it puts the ATO’s money in your account, and so does the PAYG you withhold from wages. After a strong quarter the balance looks healthy, and part of it is owed when your BAS is due.
A separate account, every time
Move GST and withheld PAYG into a second account as they come in. Your main balance then shows what you can actually spend, and BAS time stops being a shock.
Claim your GST credits
GST on your business purchases can usually be claimed back as credits on your BAS. Keep tax invoices so nothing is missed.
If you have already spent it
Talk to the ATO before the due date. Payment plans are possible, and interest and penalties grow when lodgements or payments are late.
Also asked
- When do I have to register for GST?
- When your GST turnover reaches $75,000. You can register voluntarily below that. Check ato.gov.au for the current rules.
- How often do I lodge a BAS?
- Usually quarterly for small businesses, or monthly for larger ones. The ATO sets your cycle.
- Is GST an expense for my business?
- Generally no. You collect it for the ATO and pass it on, which is why it belongs in a separate account.
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