# GST registration — what it means for tradies and finance > GST registration is compulsory once turnover passes the NZ threshold. It lets tradies claim GST back on a work ute or gear, but you charge GST on invoices. Source: https://tradiefinance.co.nz/glossary/gst-registration Published: 2026-05-15T08:00:00.000Z Category: tax-and-structure Tags: glossary, tax-and-structure Image: https://tradiefinance.co.nz/images/resources/generated/tradie/glossary/gst-registration-primary.jpg Image alt: GST and finance paperwork representing GST registration — what it means for tradies and finance --- GST (goods and services tax) is the tax added to most things you buy and sell in NZ. Registering for it changes how the dollars flow through your business — and it changes the maths on financing a work vehicle or new gear. We see GST trip up a lot of tradies at exactly the wrong moment, so it pays to understand it before you sign for an asset. ## What it is **GST registration** is signing your business up for GST with Inland Revenue (IRD). Once registered, you add GST onto what you charge customers and claim back the GST you pay on genuine business purchases. You file regular GST returns and pay IRD the difference (or get a refund if you've paid out more GST than you've collected). You must register once your turnover passes the **current GST threshold** — at the time of writing that's $60,000 of turnover in any 12-month period — but the threshold can change, so check the figure on the IRD website rather than treating it as set in stone. Turnover means your total sales, not your profit, so a busy sparkie or chippie working full-time usually crosses it without much trouble. You can also register **voluntarily** before you hit the threshold. Plenty of tradies do this early — most of their customers are GST-registered businesses anyway, and they want to claim the GST back on big startup buys like a van or a trailer of tools. Whether that stacks up for you is an accountant question, so confirm it with them or IRD. ## How it works and when it matters for tradies Here's where it lands on finance. When you buy a work vehicle or equipment, the price you see usually includes 15% GST. If you're GST-registered and the asset is for genuine business use, you can claim that GST portion back from IRD. On a $46,000 ute (GST-inclusive), the GST slice is $46,000 × 3 ÷ 23 = $6,000 — that's the 3/23 rule for working out the GST inside a GST-inclusive price. That $6,000 is a real cashflow win. It comes back to you on a GST return, often within a few months of purchase, and many tradies use it to rebuild their deposit buffer or knock down the loan. How and when you claim depends on the finance structure — a [chattel mortgage](/glossary/chattel-mortgage) typically lets you claim the full GST up front, while [hire purchase](/glossary/hire-purchase) is usually claimed differently. See [GST on asset finance](/glossary/gst-on-asset-finance) for the detail, and confirm the timing with your accountant or IRD. Two things to keep straight: - **GST is not the same as depreciation.** Claiming the GST back is separate from writing the asset's value down over time. [Depreciation](/glossary/depreciation) is a different tax deduction, and you may have to pay some of it back (depreciation recovery) when you sell the asset for more than its written-down value. - **The loan and the GST claim are separate.** You finance the full GST-inclusive price, then claim the GST back from IRD afterwards — the two don't cancel out at purchase. The trade-off is the obligations. Once registered you charge GST on your invoices, keep tidy records, file returns on time (usually two-monthly or six-monthly), and pay IRD what you owe. The GST you collect from customers isn't yours to spend — it's IRD's, sitting in your account until the return is due. Treating it as income is one of the fastest ways to land a nasty bill. If you're about to finance a ute or a chunk of gear and you're not registered yet, it's worth a chat with your accountant first. Registering before the purchase can be the difference between claiming the GST back and missing it. Confirm the timing and your eligibility with your accountant or IRD — this is general info, not tax advice. When you come to finance an asset, a [business-purpose declaration](/glossary/business-purpose-declaration) usually goes hand in hand with being a genuine GST-registered trade business — it signals the borrowing is for the business, not personal use. We use that to place your application as genuine business finance, which sits largely outside the consumer CCCFA rules. ## See also - [GST on asset finance](/glossary/gst-on-asset-finance) - [Depreciation](/glossary/depreciation) - [What tradies get wrong about GST and finance](/blog/what-tradies-get-wrong-about-gst-and-finance) Not sure whether to register, or how the GST claim works on a vehicle you're financing? [Book a call](/book-a-call) and we'll talk it through in plain English — no pressure, no jargon.