Who charges GST, who doesn't and why?

Our first one is from Robert.

He says, why is it that if you're not registered with NZBN, that's the New Zealand business number, then you don't have to pay GST? But if you are, you're responsible for collecting it and a garage sale doesn't qualify.

Is there a dollar amount involved?

Okay, so there's a bit to unpack here.

Just a little.

A bit.

First, whether you have an NZBN or not doesn't actually matter at all when it comes to GST.

Those are totally different things.

You don't even need a company to potentially need to register for GST.

What matters for GST is whether your business or sole trader revenue is more than $60,000 a year, and that's revenue, not profit.

So if you're making sales of more than $60,000, you need to register for GST.

Below that, you can register, but it's optional.

Optional, OK, but why would people register for GST if they don't have to?

Well, generally because then they can claim the GST that they pay on their costs.

So when you're registered for GST, you add GST to your prices, then you send that money on to the government, but you claim back the GST you paid on your business costs too.

So if you're not at that level of income, $60,000, but you have a lot of costs, it could make sense to register for GST.

OK, that does make sense.

And there's been quite a bit of talk about this, hasn't there, that threshold, that $60,000?

Yes, that's right.

So Labour says if it's in government, it would push up the threshold to $80,000.

It actually hasn't been adjusted since 2009, so it probably does make sense to look at it at some point.

We hear about businesses who are holding off doing more sales and things like that because they don't want to trigger the threshold, which seems quite intense to me.

But I spoke to Alan Bullough, who's basically a GST guru at Deloitte.

And he says that would probably just shift the problem if we increase the threshold rather than really solve it.

And he says, actually, there's an argument that maybe everyone should be captured for GST now because it used to be that it was much harder to comply with the rules.