How can I tell if someone is registered for GST or not?

Individuals or businesses with sales under $75,000 are not required to register for GST (taxi-drivers however do need to register regardless of turnover).

 

Realistically, this means most people are registered for GST. And often companies will force contractors to register for GST so that in paying them GST, they don’t have to pay it later on their BAS.

So how do you know if your contractor is registered for GST?

 

Invoice

If the contractor has already done the work -their invoice must state if GST is included (e.g. total price includes GST or GST inclusive). Also the amount of GST payable should also be listed as well.

 

ABN register

You can look up the supplier’s name (or ABN if you have it) to find out whether they are registered for GST at: http://abr.business.gov.au/.

You can search both the business name and the legal name. For example James Smith who runs the business “ewe and me” can be searched under either name.

 

After the fact – Contractor not registered for GST

If you can’t find the invoice another way to check if the contractor is registered is dividing by 11 to find an integer (whole number).

 

This is a good (but not foolproof) way to tell if a contractor includes GST in their services.

If they charge $100 /11 = $9.09 GST – the contractor may not be registered for GST as GST isn’t a round number. (i.e. most contractors would charge $100 then add $10 GST on top)

 

Note that if you are claiming GST credits on your BAS, you should hold a valid tax invoice.

Posted in Business, Tax

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