XBert Type: Standard
Accounting Software: Xero, MYOB
Country Restriction: Australia only
Risk Type: Tax Risk
Business Function: Compliance
Overview
The "GST registration required" XBert lets you know when an Australian business has turned over enough to need GST registration but does not appear to be registered. Registering on time keeps the business compliant with the Australian Taxation Office (ATO) and avoids backdated GST and penalties.
What it does
XBert adds up the income posted in the ledger over the last 12 months to work out the business's GST turnover. It compares that turnover against the ATO registration threshold and checks whether the business looks registered for GST.
When working out turnover, XBert only counts income that actually contributes to GST turnover. It leaves out amounts that are not part of GST turnover, such as GST-free and BAS-excluded income (for example certain trust distributions, dividends received, interest and residential rent).
How it works
This XBert fires when all of the following are true:
The business's GST turnover for the last 12 months is above the relevant threshold.
The business was not registered for GST as at the end of the assessed financial year, based on the GST registration history held against its ABN.
The business is not already collecting GST on its income.
The thresholds it compares against are:
$75,000 for most businesses.
$150,000 for a not-for-profit charity.
To stay accurate, XBert deliberately stays quiet in a few situations so it does not raise a false alarm:
If the business is already collecting GST on its income, XBert treats it as registered, even if its public registration record looks out of date.
If the business was registered for GST at the end of the assessed year, it will not fire, even if the registration has since lapsed.
Income that is GST-free or BAS-excluded is not counted towards turnover, so investment and trust income does not wrongly push a business over the threshold.
Re-synced or revised income lines are only counted once, so turnover is not overstated.
When turnover passes the threshold, the ATO generally requires the business to register within 21 days.
Example/Use Case
Barry runs a sole-trader business selling automotive parts through Xero. By May, his GST turnover for the trailing 12 months has reached just over $82,000, but he has never registered for GST and is not charging GST on his sales. XBert raises this alert so Barry's bookkeeper can register him for GST within the 21-day window, start charging GST on sales, and avoid the ATO backdating his registration and chasing GST he never collected.
Accounting software
Xero and MYOB. QuickBooks Online is not supported for this XBert, as it does not provide the reliable ABN data this check relies on.
Which countries it supports
Australia only.
Processes
This XBert sits under the Compliance business area. To resolve it:
Confirm the business's GST turnover for the last 12 months and check whether it has genuinely passed the relevant threshold.
Check the ABN on the ATO's ABN Lookup to confirm whether the business is already registered for GST and from what date.
If turnover has passed the threshold and the business is not registered, register it for GST with the ATO, ideally within 21 days.
If the business is already registered, make sure its ABN and GST registration details in the ledger are correct and up to date so the record matches the ATO.
If the income over the threshold is actually GST-free or BAS-excluded, correct the tax codes on those transactions so turnover is calculated correctly.
Once the registration is in place or the records are corrected, mark the XBert as resolved.