How to Register for GST in 5 Easy Steps

Registering for GST in New Zealand is a straightforward process that you can complete online. Here's how to do it in five simple steps.

Step 1: Check if You Need to Register

If your business earns over NZD 60,000 per year, you must register for GST. If you're under this amount, you can still choose to register voluntarily.

This threshold applies to your turnover in any consecutive 12-month period, not just the financial year. You should also register if you expect your turnover to exceed $60,000 in the next 12 months.

Here's how to determine if you need to register:

• Add up your turnover (total sales and income, excluding GST) for the past 12 months.
• If this amount is $60,000 or more, you must register for GST.
• If you're close to the threshold, estimate your turnover for the coming months. If it will take you over $60,000 in any 12-month period, you should register.

Even if registration isn't mandatory, you might consider voluntary registration if:

• You primarily sell to other GST-registered businesses (they can claim back the GST you charge).
• You have significant expenses with GST that you could claim back.
• You want your business to appear more established to clients and suppliers.

Step 2: Gather Your Information

Have your IRD number, business details, and income information ready. This will speed up the process.

You'll need the following information to complete your registration:

• Your IRD number: If you don't have one, you'll need to apply for this first.
• Business identification details: Your business name, trading name (if different), and contact information.
• Business structure: Whether you're a sole trader, partnership, company, or trust.
• Company number: If you have a registered company, you'll need your company number from the Companies Register.
• Bank account details: For receiving any GST refunds.
• Business activity: A description of what your business does.
• Turnover information: Your actual or expected annual turnover.
• Business commencement date: When you started or will start your business.

Having all this information ready before you begin will make the registration process much smoother.

Step 3: Apply Online

Go to the Inland Revenue website, log into your account, and follow the instructions to register for GST. The process is quick and user-friendly.

Here's a detailed walkthrough of the online application process:

1. Visit the Inland Revenue website at www.ird.govt.nz
2. Log in to myIR (your Inland Revenue online account). If you don't have an account, you'll need to set one up first.
3. Once logged in, select "I want to..." from the top menu, then choose "Register for GST".
4. Follow the on-screen prompts to enter your business details, including:
   • Business structure and details
   • Contact information
   • Business activity description
   • Turnover information
5. Choose your filing frequency (monthly, two-monthly, or six-monthly) based on your business size and preference.
6. Select your accounting basis (payments, invoice, or hybrid). For most small businesses, the payments basis is simplest.
7. Specify your GST registration date. This can be:
   • The date you became liable (reached the $60,000 threshold)
   • The date you voluntarily choose to register
   • A future date (if you're registering in advance)
8. Review all your information for accuracy before submitting.

The online system will guide you through each step with explanations and help text. If you get stuck, Inland Revenue has helpful guides on their website and customer service representatives available to assist.

Step 4: Confirm Your Registration

Once approved, Inland Revenue will send you a confirmation letter. This confirms that you can now charge GST.

The confirmation usually arrives within 5-10 working days and includes:

• Your GST number (which is the same as your IRD number)
• Your GST registration date
• Confirmation of your filing frequency
• Confirmation of your accounting basis
• The due date for your first GST return

Keep this confirmation letter for your records. You'll need your GST number for your invoices and when communicating with suppliers and customers about GST matters.

You can also check your GST registration status by logging into your myIR account, where you'll see GST now listed among your tax types.

Step 5: Start Charging and Collecting GST

With your registration complete, you can begin adding GST to your invoices and collecting it from customers. Keep track for easy reporting.

Here's what you need to do to implement GST in your business:

Update Your Invoicing

Ensure your invoices meet the requirements for tax invoices, including:

• The words "Tax Invoice" displayed prominently
• Your name and GST number
• The date of issue
• Customer's name and address
• Description of the goods or services
• Quantity or volume of goods or services
• Price excluding GST
• The GST amount
• The total price including GST

Most accounting software can automatically update your invoice templates once you enter your GST details.

Adjust Your Pricing

Decide whether to absorb the GST into your existing prices or increase them to account for GST. This may depend on your client base and competitive environment.

Set Up GST Tracking

Establish a system to track:

• GST collected on sales (output tax)
• GST paid on purchases (input tax)
• Zero-rated supplies (like exports)
• GST-exempt transactions

Good accounting software can automate much of this tracking for you.

Plan for GST Payments

Set aside the GST you collect so it's available when you need to pay Inland Revenue. Many businesses find it helpful to keep this money in a separate account to avoid spending it.

Calendar Your Filing Dates

Mark the due dates for your GST returns and payments in your calendar to ensure you don't miss them. Late filing can result in penalties and interest charges.

Additional Tips for Successful GST Registration

Consider Your Registration Date Carefully

If you're registering voluntarily, you can choose your registration date. Consider selecting a date that aligns with your financial year or the start of a quarter to simplify your record-keeping.

Understand Zero-Rating and Exemptions

Familiarise yourself with which supplies are zero-rated (like exports) or exempt (like financial services) to ensure you apply GST correctly.

Keep Good Records from Day One

Establish good record-keeping habits from the start of your GST registration. This will make completing your returns much easier and help you in case of an audit.

Consider Professional Help

If you're unsure about any aspect of GST registration or compliance, consider consulting with an accountant or bookkeeper. Their expertise can prevent costly mistakes and potentially save you money through proper GST planning.

Conclusion

Registering for GST is a significant step for your business, but the process itself is straightforward. By following these five steps, you can ensure you're compliant with New Zealand's GST requirements and set up for success with your ongoing GST obligations.

Remember that GST registration comes with ongoing responsibilities, including regular filing and payment. However, with good systems in place, these responsibilities can be managed efficiently, allowing you to focus on growing your business.