When starting a business, business owners need to estimate what the turnover is going to be, and weather they need to register for GST. Without going into to much technical detail, buisnesses basically need to ne registered for GST if their turnover exceeds $75,000 per year.
An extremely common error I see is that businesses wait until they have been trading for a few months before they decide to register for GST. They then register for GST and forget to (or are not allowed to) backdate the GST registration to the date they first started incurring expenditure.
Businesses can only claim GST from the start date of their GST registration. This effectively means that they cannot claim the GST on all the expenses they have incurred in setting up the business if they have made this error.
This can be a very costly error.
Shane Holbeck
www.accountix.com.au
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