Still registered for GST, but your turnover has dropped well below $75,000? Plenty of business owners find themselves in this exact spot.
There are a few common reasons to consider GST cancellation. Apart from your turnover falling below the GST registration threshold, you might be selling or closing your business. Or maybe you could be changing your business structure, like moving from a sole trader to a company. Whatever the case, it may be time to cancel your GST registration.
That said, it’s important to get the timing right. You might otherwise end up lodging unnecessary activity statements or picking the wrong cancellation date, both of which can cause issues with the ATO.
So, how do you cancel your GST registration the right way? This guide will show you how, starting with eligibility and ending with your final obligations.
Cancel GST Registration: Eligibility Rules, Requirements and Key Considerations
You can cancel your GST registration if your annual GST turnover falls below $75,000 and you no longer need to be registered. But before you go ahead, there are a few eligibility rules and considerations worth understanding first.
Can I Cancel My GST Registration?
Yes, you can cancel your GST registration in a few different situations. The most common reason is, as we mentioned, when your annual turnover falls below $75,000, or $150,000 if you’re a non-profit organisation.
You can also cancel if you’ve stopped making taxable sales, sold your business, or are closing a business in Australia for good. If your business activities have permanently changed and you no longer earn income that requires GST, that also qualifies.
Situations Where GST Registration Is Still Compulsory
That said, not everyone has the option to deregister. For example, if you’re a taxi driver, a ride sourcing operator, or you provide chauffeur services, compulsory registration applies regardless of what your turnover looks like.
The same rule covers non-resident businesses supplying goods or services in Australia. And if your projected turnover is likely to climb back above $75,000 within the next 12 months, you’ll need to stay registered for GST for now.
Should You Keep or Cancel Your GST Registration?
This one really comes down to your situation. If you choose to cancel your GST registration, you’ll have fewer activity statements to lodge and less bookkeeping to manage. That frees up your time and cuts admin costs.
On the flip side, staying registered for GST means you can still claim GST credits and fuel tax credit entitlements on business purchases. It also gives you a more professional look when working with larger clients who expect tax invoices.
What Happens to Your Australian Business Number?
Your GST registration is linked to your Australian Business Number, but they’re actually separate registrations. This means if you end your GST registration, your ABN will stay active unless you cancel your ABN on its own.
That’s why most businesses keep their ABN even after GST cancellation, especially if they still plan to operate in some form. However, if you’re shutting down completely, the ATO will expect you to deregister your ABN within 28 days.
Other Registrations That May Be Affected
Cancelling GST can also flow on to several other registrations tied to your account, so it’s worth checking each of these before you proceed:
- Fuel Tax Credit: Once your GST registration ends, you can no longer claim fuel tax credits on eligible purchases. For businesses that rely heavily on fuel for vehicles or machinery, that’s an extra cost to factor into your budget.
- Luxury Car Tax: Your luxury car tax registration is cancelled automatically alongside your GST. It also means future vehicle purchases won’t qualify for related credits.
- Wine Equalisation Tax: Your wine equalisation tax registration follows the same path and drops off with your GST. So if you’re in the wine industry, it’s a good idea to confirm the details directly with the ATO.
- PAYG Withholding: Here’s where things work differently. Your withholding obligations don’t disappear just because your GST is cancelled. As long as you still have employees on the books, PAYG withholding stays in place and needs to be managed separately.
- PAYG Instalments: These payments relate to your expected income tax rather than GST, so the deregistration process is completely separate. We advise looking at your current PAYG instalments schedule and checking with the ATO if you’re unsure.
- Fringe Benefits Tax: Whether you need to keep this registration depends entirely on your employee benefits. If you still offer things like company cars or salary packaging, your fringe benefits tax obligations will continue even after GST cancellation.
Take a close look at each of these before submitting your cancellation. Missing even one could leave you with unexpected tax obligations down the track.
How to Cancel GST Registration Online and Meet Your ATO Obligations
The quickest way to cancel your GST registration is through the ATO‘s online services for business portal. But before you start, make sure your login and authorised contact details are up to date.
Here’s a step-by-step breakdown of how to get it done, along with the obligations you’ll need to stay on top of:
Step 1: Access Online Services
Start by logging into your online services for business account using your myID. Once you’re in, check that your authorised contact information is current.
The ATO uses these details to send updates about your cancellation request, so they must be accurate.
Step 2: Locate Tax Registrations
Next, go to the tax registrations section in the main menu. There, you’ll see a full list of your registered tax details, including your GST registration status, ABN information, and any other active tax settings linked to your account.
Take a moment to carefully review each detail to make sure everything is accurate and up to date before you continue.
Step 3: Submit GST Cancellation Request
Once you’ve confirmed everything, select the option to end your registration. You’ll need to enter your business details, a reason for the cancellation, and your preferred cancellation date.
Note that your cancellation date should be the last day you want your GST registration to remain active.
Step 4: Confirm Submission
Finally, review the declaration carefully and submit your request. This confirms the information is accurate and you’re authorised to proceed.
The ATO will then send a confirmation notice to your registered contact, so keep an eye out for it and save a copy for your records.
Alternative Ways to Cancel Your GST Registration
If online isn’t your thing, you’ve still got other options. A registered tax agent or BAS (Business Activity Statement) agent can lodge the cancellation on your behalf (which can be useful if you have multiple GST-registered entities).
You can also call the ATO directly on 13 28 66 for support, or complete and post the paper form NAT 2954 if you prefer a manual process.
ATO Cancel GST Registration: What Happens Next?
After you submit your request, the ATO usually processes GST cancellation within 10 business days. You’ll receive a confirmation notice with your official cancellation date once it’s done. From that point, your records update, and you’re no longer listed as registered for GST.
Just keep in mind that any compliance obligations from before the cancellation still apply, which we’ll get into in the next section. So don’t assume everything is wiped clean.
Activity Statements You May Still Need to Lodge
Even after your GST cancellation goes through, there’s likely still some lodgment work to do. For instance, you’ll need to lodge a final business activity statement that covers the last tax period right up to your cancellation date.
On top of that, any future activity statements tied to PAYG withholding or PAYG instalments may still continue depending on your situation. The same applies to any outstanding tax and superannuation lodgment obligations. Check with the ATO to make sure nothing gets missed.
7 Costly GST Cancellation Mistakes to Avoid
Even a small slip during the GST cancellation process can lead to fines, extra paperwork, or issues with the ATO. Before you end your GST registration, make sure you’re not falling into any of these common traps:
Mistake #1: Cancelling When Turnover Will Rise Again
If your GST turnover is low now but likely to pass $75,000 again within 12 months, hold off on cancelling. Otherwise, you’ll have to re-register. In some cases, the ATO may also backdate your registration, which means they’ll treat you as if you were registered from an earlier date. This can lead to penalties such as fines or interest charges for the period you were not registered.
Mistake #2: Picking the Wrong Cancellation Date
As mentioned earlier, choosing the wrong cancellation date can create issues. If you choose a date that’s too early, you could miss GST that still needs to be reported on sales you have already made.
On the other hand, if you choose a date that’s too late, you may end up continuing to lodge GST returns that are no longer required. For this reason, your cancellation date should be the last day you want your GST registration to stay active.
Mistake #3: Thinking GST Cancellation Also Cancels Your ABN
A lot of people get caught out by this one. Cancelling GST doesn’t cancel your Australian Business Number, since they’re two separate registrations.
However, you’ll need to cancel your ABN separately within 28 days of stopping operations only if you’re closing down fully.
Mistake #4: Skipping Your Last GST Activity Statement
You still need to lodge your last GST activity statement after cancellation. Skipping it can lead to ATO penalties, even if the amounts are small.
This final return covers the tax period up to your cancellation date and includes any remaining GST collected or owed.
Mistake #5: Overlooking Fuel Tax Credit Loss
Once your GST registration is cancelled, you also lose access to fuel tax credits. For businesses that regularly use vehicles, machinery, or equipment, this can noticeably increase operating costs.
You will no longer be able to claim credits on fuel purchased for business activities, which means those expenses come entirely out of your own pocket.
Before cancelling your registration, consider how much fuel your business uses and whether the added cost could affect your bottom line.
Mistake #6: Still Issuing GST Tax Invoices
After deregistration, you can’t charge GST or issue tax invoices anymore. However, some business owners do this by accident, especially if their invoicing software still has GST switched on.
Be careful here, because if you do charge GST after cancellation, you’ll still owe that amount to the ATO even though you’re no longer registered.
Mistake #7: Forgetting About Other Registrations
Cancelling GST can affect other registrations like PAYG or fringe benefits tax. These don’t cancel automatically, so you’ll need to review each one and update it separately.
Make GST Cancellation a Strategic Business Decision
So, did this guide clear things up? We hope it made the whole process feel a bit less overwhelming.
GST cancellation can save you time and reduce your compliance obligations, but that doesn’t mean it’s the right move for every business. Your eligibility really comes down to your turnover, business activity, and any industry-specific rules that apply to you.
It’s also worth remembering that your final activity statements still need to be lodged after cancelling registration. And since your GST registration and ABN are separate matters, you’ll want to handle each one individually.
If you’re still unsure whether cancelling your GST registration is the right call, a quick chat with a tax professional can save you from costly mistakes down the line.
For more practical guides like this one, head over to Australian Business Magazine.
Frequently Asked Questions About GST Registration and Cancellation
Here are some of the most common questions Australian businesses ask about GST registration and cancellation. If you didn’t find your answer above, chances are it’s covered below.
Can I Cancel My GST Registration and Register Again Later?
Yes, you can. If your annual turnover later rises above $75,000, you’ll need to re-register. The ATO may also apply your registration retrospectively if you should have been registered earlier.
How to Cancel GST Registration When Changing Business Structure?
If your business structure is changing, like moving from a sole trader to a company or a partnership to a company, you’ll need to cancel the old registration. The new entity then registers for GST separately, so treat it as a fresh business changing hands.
Does GST Cancellation Affect Simplified GST Registration for Non-Resident Businesses?
Yes, for a non-resident business using a simplified GST registration, the cancellation process works a bit differently. In particular, the standard GST registration rules don’t always apply to non-resident arrangements, so check the ATO’s specific guidelines for your situation.
What Happens if I Continue Operating on a GST Registered Basis After Cancellation?
If you keep operating on a GST-registered basis after cancellation, you could run into serious trouble with the ATO. For example, if you issue tax invoices or charge GST when you are no longer registered, you’ll still need to pay that GST to the ATO. This can also require you to correct or update your records. Fixing these mistakes quickly is the best way to avoid penalties.
