To GST or not to GST that is the question.
Startups will apply for ABN so they can trade with wholesale companies. There is some misconception that they also need to apply to be registered for GST. This is not the case until turnover exceeds $75,000 and the only time you would need to consider registering before reaching the threshold is if you are purchasing more than you are receiving income (compare your monthly sales/purchases to know when you will benefit). In our industry which is generally a majority service-based income, it would be wiser to consider holding off registering but using that 10% to grow your business in the meantime.
Consider also that when you do go over the threshold and register, I would not recommend advertising to your customers “price increase because I am now applying GST”. Customers don’t really want to know how much you are earning and it certainly isn’t any of their business. When I developed my pricelist I charged with the GST in mind, so that when I had to register I simply absorbed the 10% and my clients were non the wiser of my income, but continued to do my annual increase as normal.
So while some business owners may argue over absorbing it, you’ve actually benefited 10% extra up until the time of registering. You’ve built your business with the extra and you haven’t pissed any clients off with the increase.
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