When do I have to register for sales tax?
When your sales pass the line where you work.
- For
- See the month your sales pass the line, before it sneaks up on you.
- When
- Each month, while you’re under it
Try it
4,000 a month against a 30,000 line: you pass it in month 8.
The month you pass it = the line ÷ sales a month, rounded down, plus one.
Watch the running total, not the month.
Worked out
| Sales a month | A year | Pass it in |
|---|---|---|
| 2,000 | 24,000 | Not this year |
| 3,000 | 36,000 | Month 11 |
| 4,000 | 48,000 | Month 8 |
| 6,000 | 72,000 | Month 6 |
Easy to get wrong
- Watching one month, not the total.
- Finding out after you’ve passed it.
- No record of each month’s sales.
- Old invoices used after you register.
The tool for it
Questions
Where is the line?
It differs by place and changes; type yours in. Check the rule where you work.
Do I count sales or profit?
Usually sales, before costs. Check the rule where you work.
Which 12 months count?
Some places count the calendar year, some any 12 months in a row. Check the rule where you work.
Can I register before I pass it?
In many places, yes. Check the rule where you work.
What changes once I register?
Your prices carry tax, your invoices show it, and you file returns.
Do I tell my customers?
Say it on your quotes from the day you start charging it.
What if I passed it months ago?
Register now, and ask an accountant about the months before.
Does an accountant help here?
Yes, once, to set it up right. This sum tells you when to call.