Overdue BAS for freelancers: overseas clients, platform fees and GST

Let 2Fin do the boring bits

Catching up is mostly sorting, and sorting is the part 2Fin takes off you. Bring in two years of bank statements at once — CSV, Excel or PDF, several files in one go — and Fin reads every line; in testing, 1,891 transactions came in in about a second on a desktop computer. Each transaction is categorised with its GST or VAT worked out, every overdue quarter is listed with its due date, and Fill all periods saves a draft of each one with a single press.

What is left for you is the decisions, not the data entry. Purchases are grouped by payee — the software subscriptions, the platform fees, the phone and internet — so you answer each payee once and the answer covers every quarter. Fin’s confident guesses (80% sure or more) can be accepted in one tap and undone one by one, and a payee can become a rule so the next import sorts itself. Every figure opens to the transactions inside it, and the finished statements export for you or your agent to check and lodge.

Overseas clients: GST-free, but not invisible

A service is generally GST-free when it is used or enjoyed outside Australia, or supplied to a non-resident who is not in Australia when you do the work. The ATO’s own example is an Australian freelance writer engaged by an English publisher: no GST on the invoice. The detail has conditions, so read the ATO’s exports page for your situation. This is general information. Check what applies to you with a registered tax or BAS agent, or with the tax office.

Two things trip freelancers up. GST-free sales still count toward the $75,000 registration threshold — $50,000 of local work and $50,000 from overseas means you must register. And on Simpler BAS there is no separate export label: GST-free sales go into G1 with everything else, and only the GST on taxable sales goes in 1A.

Platform fees and overseas software

Upwork charges 10% GST on its own fees — the service fee, membership and Connects — until you enter a valid ABN and confirm you are registered, and says it does not refund GST charged before that. The same idea applies to overseas software you pay for: give the supplier your ABN and GST status, and it should stop charging GST. You only owe a reverse charge on imported services when you could not have claimed a full credit, such as for private use, so a registered freelancer using the service fully for work generally owes none.

Two warnings from the ATO. Quoting your ABN for a personal purchase triggers the reverse charge, and quoting one when you are not GST-registered can attract penalties. Offshore suppliers registered under the simplified system hold an ARN, not an ABN, and cannot issue a valid tax invoice, so a credit for GST they charged needs a valid tax invoice or a purchase of $82.50 or less.

Getting two years of client payments in order

Freelance income tends to arrive from everywhere: bank transfers, payment platforms, a few foreign-currency deposits. A catch-up starts by sorting each payment into its quarter and marking each client as local or overseas. A foreign-currency invoice has to let the GST be worked out in Australian dollars, so record the conversion.

Freelancing in the UK or New Zealand

In the UK, VAT registration starts at £90,000. On the Flat Rate Scheme, computer and IT consultancy is 14.5%, and a freelancer who spends little on goods is a “limited cost business” paying 16.5%. In New Zealand, services to clients who live overseas and are not in New Zealand when the work is done are zero-rated, provided you can show where the client is with two pieces of evidence such as a billing address and bank details.