In our previous article “GST Registration: Understanding The Basics”, we explained that if you are in business you may voluntarily register for GST, or if you meet certain criteria such as a minimum turnover threshold it becomes compulsory to register. If you have registered for GST then it is important to note that all of your taxable activities must be taken into account, regardless of how minor they are. A taxable activity is defined as an activity which is carried out continuously or regularly by a business, trade, manufacturer, professional, association or club. Taxation activities don’t include working for salary/wages, hobbies or private recreational pursuits, occasionally selling a private item or making GST-exempt supplies.
However, it is possible to separate out your taxable activities, for example by operating one activity under an individual’s personal name and operating another activity as a company. In this way the GST registration threshold would apply to each entity separately, and not to their combined turnover. For example, a couple may run an AirBnB together as a partnership while one of them also owns a courier business in just their own name. In this instance either or both of the activities may be able to operate without GST if they are individually both under the turnover threshold.
Please contact us for more information on GST registration and structuring advice.