As a sole trader you operate under one ABN and one individual tax file number, even if you run two businesses. This means the two businesses are combined for GST: their turnover is added together, so once your total turnover reaches $75,000 you must register for GST across both.

You run a repair business and you sell cakes on the weekend. Neither one turns over $75,000. So neither needs GST, right?

This is the single most common GST mistake I see with sole traders, and it is expensive to fix after the fact. The good news is the rule itself is not complicated once you understand who it applies to.

My name is Mina Baselyous. I am a CPA and Chartered Tax Advisor based in Melbourne, and I work with sole traders and small business owners across Australia every day. This guide explains exactly how GST registration works when you run two separate activities under one ABN, and where the threshold trap catches people out.

GST Registration Attaches to the Entity, Not the Business Activity

This is the core principle that clears up the confusion: GST registration in Australia applies to the entity, not to individual business activities.

As a sole trader, you are the entity. You have one ABN. You may have registered multiple business names — perhaps one for your repair work and one for your cake sales — but those names do not create separate legal entities. They are trading names for the same person.

Once you are registered for GST, every taxable supply you make, from every activity, in every business name, carries GST. There is no mechanism under Australian tax law to register one activity for GST and leave another outside it. The registration covers everything you do as that entity.

This matters for the threshold calculation too. The ATO does not ask whether your repair business turns over $75,000. It asks whether you, as the entity running all your enterprises, are approaching or have exceeded $75,000 in GST turnover.

The Threshold Is Aggregated Across Everything You Do

This is the section that catches sole traders out — and it is the reason the ATO sees so many cases of late or missed GST registration.

The GST registration threshold is $75,000 per year in current or projected GST turnover. That $75,000 is calculated across every enterprise activity you carry on, not per business name or per activity.

Here is a concrete example:

• Repair business annual revenue: $48,000
• Weekend cake sales annual revenue: $34,000
• Combined GST turnover: $82,000

In isolation, neither activity reaches $75,000. But you are not assessed in isolation. Your combined GST turnover is $82,000, which exceeds the threshold. You are required to register for GST.

The same logic applies to the projected turnover test. If you reasonably expect that your total turnover across all activities will exceed $75,000 in the next 12 months, you are required to register before you hit that figure — not after.

What Happens If You Miss the Registration Deadline?

If you should have been registered but were not, the ATO can require backdated registration to the date you first exceeded the threshold. That means GST becomes payable on all taxable supplies you made from that date, even if you never charged GST to your customers. The General Interest Charge applies on the unpaid amounts, compounding daily. The practical outcome is that money you received and already spent becomes a GST liability out of your own pocket.

The question to ask yourself is never “does this business need GST?” The right question is “do I, as the person running all of these activities, need to be registered for GST?”

What Changes on the Day You Register for GST

You Charge GST on Every Taxable Supply, Across Both Activities

Once registered, you must charge 10% GST on every taxable supply from every activity. If you were pricing your cake sales without GST and you register, your pricing needs to be reviewed immediately. You either absorb the GST out of your existing margin, or you adjust your prices upward to recover it. For consumer-facing activities like market stalls, that pricing conversation can be awkward — another reason to get your registration timing right from the start.

You Can Claim Input Tax Credits on Both Activities Too

The upside of registration is that you can claim input tax credits on purchases and expenses across both activities, not just one. That means:

• Ingredients and packaging for your cakes
• Tools, parts, and equipment for your repair work
• Vehicle costs used across both activities (apportioned if there is private use)
• Business software, phone costs, and professional services

For many sole traders, the credit entitlement from two activities combined is meaningfully larger than from one alone, which can partially offset the compliance overhead of GST registration. It is worth factoring this in when you are modelling the real cost of registration.

Everything Reports on One BAS

You have one ABN and one GST registration, so you lodge one Business Activity Statement. You do not lodge a separate BAS for each trading name. Your bookkeeping should still separate the two activities clearly so you can track which one is actually profitable, but for GST reporting, everything consolidates into a single return. Getting your GST coding right in your accounting software across both activities is essential for an accurate BAS.

Watch: How to Check If a Business Is Registered for GST

Not sure how to verify GST registration status for yourself or a supplier? Mina walks through the process in this short BusiHealth video:

Two Genuine Exceptions Worth Knowing

Registration Does Not Turn a Supply Into a Taxable Supply

Being registered for GST does not automatically make every supply you make a taxable supply. The character of the supply still governs. GST-free and input-taxed supplies remain so regardless of your registration status.

Common GST-free supplies include most basic food, medical services, education, and childcare. Input-taxed supplies include residential rent and financial services. If you are registered for GST and you rent out a residential property, the rent remains input-taxed — you do not add GST to rent, and you cannot claim GST credits on the related expenses.

On Cakes Specifically, the Food Concession Does Not Help

Most basic food in Australia is GST-free under Schedule 1 of the A New Tax System (Goods and Services Tax) Act 1999. However, bakery products are specifically carved out of that concession. Cakes, slices, pastries, muffins, and biscuits are classified as taxable food, not GST-free food. GST applies at 10%.

If you sell birthday cakes, celebration cakes, muffins, or slices — whether at a market stall, online, or on custom order — you charge GST on those sales once registered. The basic food concession does not apply to bakery products. The ATO’s guidance on GST and food is specific on this point, and the distinction has been tested.

Is the Second Activity Even an Enterprise?

For GST to apply, the supply must be made in the course or furtherance of an enterprise. A genuine hobby — one with no commercial character and no profit expectation — is not making taxable supplies, and income from it does not count toward your GST turnover.

Be honest with yourself here. Most side activities that generate meaningful revenue will fail the ATO’s business versus hobby test. The ATO considers whether there is a profit intent, whether you operate in a businesslike way, whether there is repetition and regularity, and whether the activity resembles what others do commercially in the same field. Selling cakes at a regular market stall, taking custom orders, and earning $34,000 in a year is not a hobby.

When Two Activities Should Sit in Separate Entities

A common follow-up question is whether setting up a second entity — a company or a trust — to run the second activity would solve the GST issue by keeping each entity’s turnover below $75,000.

The short answer is no, not as a GST strategy. The ATO would likely treat deliberate fragmentation of a single economic enterprise into separate entities to avoid GST obligations as a scheme. The threshold is assessed per entity, but the intention behind the structure matters.

Where separate entities do make genuine sense is for reasons that have nothing to do with GST: asset protection between activities with different risk profiles, cleaner ownership for activities heading toward different growth paths, positioning one activity for future sale, or accessing different tax rates as revenue grows. These are legitimate structural reasons. If any of them apply to you, the right conversation is about business structure, not GST avoidance.

Running two entities also comes with real cost — two sets of accounts, two returns, separate ASIC or trust compliance obligations — and those costs need to be weighed against the actual structural benefit. It is worth modelling before committing.

If you are weighing up whether to separate your activities or stay as a sole trader, the guide to business structures in Australia is a useful starting point before we work through your specific numbers.

Frequently Asked Questions

Can I have two businesses under one ABN in Australia?

Yes. As a sole trader, you can operate multiple business activities under a single ABN. You can register different trading names for each activity through the Australian Business Register, but the ABN and the legal entity behind it remain the same person. GST obligations, income tax, and other regulatory requirements apply to you as the entity, not separately to each business name.

Do I need to register for GST for each business I run?

No. GST registration in Australia is per entity, not per business activity or business name. If you are registered, all your taxable supplies across every activity are covered by that one registration. When working out whether you need to register, the $75,000 threshold is applied to your combined GST turnover across all enterprise activities, not per activity in isolation.

Is the $75,000 GST threshold per business or per ABN?

It is per entity, which in practice means per ABN for a sole trader. All enterprise activities you carry on under that ABN count toward the one threshold. If you run two activities and their combined annual turnover exceeds $75,000, you must register for GST, even if neither activity alone reaches that figure.

Do I charge GST on cake sales in Australia?

If you are registered for GST, yes — for most bakery products. Cakes, muffins, slices, biscuits, and pastries are taxable food under Schedule 1 of the GST Act. The general GST-free food concession does not apply to these products. You charge GST at 10% on those sales.

What happens if I register for GST late?

The ATO can require backdated registration to the date you first exceeded the $75,000 threshold. GST becomes payable on all taxable supplies made from that date, even if you never collected GST from customers. The General Interest Charge applies on the unpaid amounts. Voluntary disclosure before the ATO identifies the issue can reduce penalties in some circumstances, so if you think you may have missed the registration point, get advice quickly.

Should I set up a separate ABN for my second business?

Only if there is a genuine structural reason to do so, such as asset protection, different ownership arrangements, or significantly different risk profiles. Setting up a separate entity to keep each entity’s turnover under $75,000 and avoid GST would likely be treated by the ATO as a GST avoidance arrangement. Get proper advice on your specific situation before restructuring.

The aggregated GST threshold catches more sole traders than any other GST rule. If your combined activities are approaching $75,000, or if you have already crossed it without registering, contact us at Pinnacle Accounting & Advisory before the situation becomes more expensive to resolve. With 81 5-Star Google Reviews from Melbourne business owners, we have helped a lot of people work through exactly this problem. Book a Consultation and we will look at your numbers together.

Frequently Asked Questions

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