GST on venue hire and function packages — what to charge

GST is one of those things that is simple until a customer pays a deposit in one financial quarter for an event in another, cancels, and asks for the money back. Most of the confusion at venues comes down to three questions: are we registered, is what we're selling taxable, and when does the GST fall due.

1. Are you required to be registered?

GST registration is generally required once your annual turnover reaches the registration threshold — currently $75,000 for most businesses, and a higher threshold for not-for-profit organisations. Many community halls and small clubs sit just under it and choose not to register; plenty sit just over it and must.

This matters before every other question on this page, because if you are not registered you do not charge GST at all and you cannot issue a tax invoice. A community hall turning over $40,000 a year in casual hire is not adding 10% to anything. Confirm the current thresholds and your own position with the ATO — they are the kind of figure that gets adjusted.

2. Is venue hire a taxable supply?

If you are registered, hiring out a room or hall in the course of your business is generally a taxable supply, and GST of 10% generally applies. The same is usually true of the things bundled around it — bar service, AV hire, staffing, cleaning, decorations.

Food is where people expect a complication, because some food is GST-free when sold in a supermarket. That exemption generally does not extend to food supplied as part of catering or for consumption on the premises, which is the normal situation at a function. In practice most function packages are taxable in full.

There are exceptions — certain supplies by charities and not-for-profits, for instance, can be treated differently. If you are a charity, a school or a council-run facility, do not assume the general rule applies to you. That is a conversation for your accountant, not a blog post.

3. When does the GST actually fall due?

This is the question that catches venues out, because a function is paid for in pieces across months.

Which quarter the GST lands in depends on whether you account for GST on a cash or non-cash (accruals) basis. On a cash basis it generally follows the money — you account for GST in the period you receive payment. On a non-cash basis it is generally the earlier of receiving any payment or issuing an invoice, which means raising a deposit invoice can bring the GST forward even if nothing has been paid yet.

The practical consequence: a deposit taken in June for a December wedding may well belong in the June quarter's BAS, not December's. Venues that treat deposits as "not real income yet" are the ones that get a surprise.

Booking deposits and security bonds are not the same thing

A booking deposit that forms part-payment of the price is generally consideration for the supply, and is accounted for as above.

A genuine security deposit — a refundable damage bond held purely as security for the performance of an obligation — is treated differently under the GST rules, and generally is not treated as consideration until it is either forfeited or applied against the price. The distinction turns on what the payment genuinely is, not what you call it on the invoice.

If you take both a deposit and a bond, this is worth ten minutes with your accountant once. Getting the treatment right at the start is much easier than unpicking a year of BAS later. It is also a good reason to keep the two as separate line items rather than one lump — something your deposit policy should already be doing.

4. What your tax invoice has to show

If you are registered and the sale is over the low-value threshold (currently $82.50 including GST), the customer is entitled to a valid tax invoice. A tax invoice generally needs to show:

• that the document is intended to be a tax invoice — the words "Tax invoice";
• your identity as the seller;
• your ABN;
• the date it was issued;
• a brief description of what was sold, and the quantity or extent;
• the GST amount, or a statement such as "Total price includes GST" where GST is exactly one-eleventh of the total;
• the extent to which each item sold includes GST, where not everything on the invoice is taxable.

For sales of $1,000 or more, the invoice generally also needs the buyer's identity or ABN — relevant for most functions, and easy to miss when you are invoicing an individual rather than a company. Check the current thresholds and requirements on the ATO website.

Quoting: inclusive or exclusive?

If you are advertising to the public — which most venues are — prices generally need to be shown as a single GST-inclusive total under Australian Consumer Law. Quoting a wedding at "$8,000 plus GST" on a public price list is a common and avoidable mistake. Business-to-business quoting has more latitude, but consistency is worth more than the latitude.

5. Make the system do it

None of this is difficult once, and all of it is error-prone repeated forty times a year by hand. The parts worth removing from human memory:

• the rate applied to each charge, set once against the charge rather than typed per invoice;
• the GST line calculating itself from the items rather than being worked out on a calculator;
• deposit and balance invoices carrying the right treatment automatically;
• the required tax-invoice fields present on every document because they are part of the template.

If you are revisiting how your packages are put together anyway, pricing a function package covers what belongs inside the price.

ezybooked lets you configure your tax rates and reusable charges once and applies them to every invoice generated from a booking — see the features page for how charges, taxes and invoicing fit together.