If you’re a small business owner, it can sometimes be complicated dealing with GST. When are you allowed to claim it and when are you not? How does GST even work? We’ve come up with this short guide to give you a rundown on when you can and can’t make a GST claim, to help you with your small business accounting.

Requirements needed for being able to claim GST

First of all, you must be registered for GST in order to claim GST credits. You will make these claims within your activity statement, which is why it’s important you are registered. Anything you have purchased for your business that has GST within it, you can potentially claim back.

However, these purchases need to meet certain requirements within your business. Firstly, they need to solely be related to your business and not to making input-taxed supplies. GST needs to have been included in the purchase and you need to provide evidence, such as a receipt, of the product or service you bought. When you have bought something that is worth more than $82.50, you will also need a tax invoice from that supplier. You also need to claim the GST on small business purchases within four years of buying the product or service.

When you aren’t eligible to claim GST

There are some scenarios where you won’t be able to claim GST as a small business. These include not having a valid tax invoice or receipt, or having purchased a product or service in which GST wasn’t included. You also can’t claim GST on wages you have paid out to your employees, as GST isn’t included on these payments. If you have purchases vehicles over a certain payment threshold, sometimes you can’t claim GST on this amount either.

There are some goods and services that don’t include GST, and you therefore won’t be able to claim on these items either. These products include GST-free products, input-taxed items and purchases from businesses that haven’t registered for GST.

It can sometimes be complicated trying to figure out what you can claim GST on and what you can’t. If you need help sorting out small business accounting tasks such as these, do not hesitate to contact us for assistance – we are more than happy to help.