GST, ABNs and buying courses as a sole trader

Every April I watch the same receipt land in a sole trader’s inbox: US$49.99 from a platform that thinks Australia is a billing region, a course title that sounded necessary at 11pm, and a hopeful note in the bookkeeping app that says “professional development”. Sometimes that receipt is a business expense. Sometimes it is a hobby with a GST daydream attached. The difference is not the quality of the videos. It is whether the course was for the business you already have, whether GST was ever charged, and whether you can prove either fact in August.

This is a practical briefing for people who invoice under their own ABN and buy digital courses — workplace communication, platform how-tos, a university microcredential, the occasional “scale your course” workshop that the creators desk would side-eye. It is not legal, tax or financial advice. The ATO publishes the rules on self-education, GST-free education and tax invoices. A registered tax agent applies them to your facts. If a number here would change a return, stop and ask that person. Journals do not issue private rulings.

The money and funding hub covers the other ways Australians pay. This page is the one you read when the payer is you, and you would like the purchase to look like a business in the file.

The course has to serve the business you are already in

The ATO’s self-education logic, in the English a night-class teacher uses, is this: you can usually deduct training that maintains or improves the skills you use to earn your current assessable income, or that is likely to increase that income in the same line of work. You usually cannot deduct training that would qualify you for a new occupation, or that you are doing because you might one day start a different business.

A bookkeeper in Prospect who buys an advanced Xero or BAS-agent update course is in the first bucket. A bookkeeper who buys a Certificate III in Individual Support because aged care “seems recession-proof” is in the second, until they are actually carrying on that care business. A photographer who buys a lighting workshop is in the first. A photographer who buys a coding bootcamp is telling a story that needs more than a receipt.

Sole traders blur this because the person and the business share a brain. Write the connection down when you buy, not when you reconstruct the year. “Bought 12 April — client work now includes Instagram ads for two cafes — course is Meta ads certificate” is a file note. “Upskilling” is not.

The same honesty applies if you sell courses. Buying a competitor’s program to research pricing for the Australian market can be a business expense if you are already in that trade. Buying it because you are thinking about maybe launching something in spring is a consumer purchase that you are welcome to enjoy. The ATO has met optimism before.

If you are an employee who also has an ABN on the side, do not casually run a course through the side business because the employer said no. The course has to relate to the ABN activity, not to the day job, unless you like conversations about personal services and hobby losses. If the employer might still pay, use how to ask first. Two claims on one fee is how people meet auditors.

GST is a registration question, then an invoice question

GST in this story has three switches. All of them have to be on before you start dreaming of a credit.

Are you registered for GST? If your turnover is under the $75,000 threshold and you have not registered, there is no input tax credit to claim. You might still deduct the expense for income tax if it is allowable. Those are different ledgers. Plenty of sole traders treat “I have an ABN” as “I am in the GST system”. An ABN is a name-tag. GST registration is a separate tick.

Was GST charged on the course? Many Australian TAFEs and universities supply GST-free education when the course is a professional or trade course or a tertiary course as defined in the GST Act. A GST-free fee is good for your cash. It is useless as a GST credit, because there was no GST. A private workshop, a marketplace special, or a “business accelerator” will often be taxable and include 10 per cent. Coursera, Udemy and LinkedIn Learning sit in a messy middle: some local resellers charge GST, some overseas checkouts add Australian GST on digital services, some show a US price and nothing that looks like a tax invoice.

Do you hold a tax invoice? For credits over the low-value threshold, the ATO wants a document that does the job of a tax invoice — the supplier’s identity and ABN, the words “tax invoice”, what was supplied, the date, your identity if the amount is high enough, and the GST amount or a statement that the total includes GST. A pretty PDF certificate is not a tax invoice. A Stripe email that says “$49.99 USD” and a California address may not be one either.

If any switch is off, you can still have a deductible expense. You just cannot also have a GST credit. Claiming both on a GST-free TAFE fee is the kind of small, confident error that makes a BAS untidy.

I am not going to recite every exception for low-value purchases, second-hand goods or the cases where the ATO lets you reconstruct a missing invoice. That is what a tax agent is for. The working habit is simpler: if you will claim GST, buy in a way that produces an Australian tax invoice, in the business name, to an email you control.

Overseas platforms are not a loophole. They are a paperwork problem.

Digital marketplaces have spent a decade being told to collect GST on sales to Australian consumers. Some do it cleanly. Some add a line that says “GST 10%” and still will not give you an ABN. Some do neither, and you have a foreign-currency charge that your bank converts at a rate you will forget.

For a sole trader, the practical questions are:

• What currency did I pay, and what did it cost in AUD on the statement date? The bank line is your evidence, not the website’s marketing dollars.
• Did the receipt mention GST, an Australian entity, or an ABN? If yes, file it as a tax invoice candidate. If no, file it as a possible income-tax deduction and do not invent a GST credit.
• Is the supplier a related educational institution whose course might be GST-free even if they are overseas? Possible, not typical, and not something to assume from a “university branded” landing page. The university may be licensing a logo to a commercial arm.
• Will I need a refund? Australian Consumer Law can still reach traders who market here, but the everyday path is the platform’s own policy. Udemy’s window is tight. Coursera’s is wider if you have not chased the certificate. Neither cares about your BAS due date.

Do not run the purchase through a friend’s Australian company “so we can claim the GST” unless that company is genuinely the buyer and the course is for its business. That is not clever. That is someone else’s ABN on a transaction they cannot explain.

If you sell to Australians and you are reading this for the other direction, the companion problems — what to charge, whether your program is GST-free, how to write a tax invoice — live in pricing a course for the Australian market. Do not copy a US pricing page and add 10 per cent later. The later is when you meet the client who wants a tax invoice dated last Tuesday.

What to put on the file besides the receipt

A claim dies in the details. Keep:

• The tax invoice or receipt, plus the bank or card statement line.
• The syllabus or order confirmation that shows it was a course, not a software subscription you forgot to cancel.
• A one-line note on how it relates to current work. Client names are fine in your private file. Do not email those notes to a group chat.
• Login evidence if you are also claiming it as a serious professional-development hour for a membership body — completion, not just payment.
• The refund policy you accepted. If you drop the course after census on a HELP-enabled award, you may have a debt and no deduction for a fee you did not pay in cash. Different systems, same calendar.

You do not need to send any of this to a journal, a platform or a Facebook “BAS tips” group. Our privacy policy is explicit that we do not want tax file numbers, Unique Student Identifiers or copies of qualifications in the contact form. Do not paste them there. Do not paste them into a course provider’s “quick eligibility quiz” unless you have read their privacy collection notice and are actually enrolling.

ABN hygiene is the other quiet task. Use the business name that sits on the ABR when a provider asks who to invoice. If you trade as a name that is not registered, you will spend a morning explaining why the invoice says “Mike’s Courses” and the BAS says your legal name. When you issue invoices, the same standard applies in reverse. People who buy courses from you will want a tax invoice that their agent can read. Give them one. It is cheaper than a review on a forum.

Mixed purchases, mixed motives

A few patterns that go wrong every winter:

The family login. You buy LinkedIn Learning for the business and your teenager uses it for a media assignment. Apportion, or do not claim the whole year. The ATO understands households. It does not understand amnesia.

The conference that was a holiday. A one-day workshop in Auckland with four days of leave attached is a mixed expense. Travel rules are their own thicket. Do not call the lot “training” because there was a name-tag.

The software bundle. “Course plus twelve months of the pro tool” is two things. The tool may be deductible if you use it in the business. The course is the self-education analysis above. Split them on the file even if the vendor issued one invoice.

The HELP-enabled university unit. If FEE-HELP or HECS-HELP paid the tuition, you did not pay it in cash this year. What you can deduct, if anything, is a different and narrower question (and sometimes nothing). Do not deduct a fee the Commonwealth lent you and then also ignore the debt. Read FEE-HELP and VET Student Loans as a borrower first, a claimant second.

The “mastermind” with no syllabus. If you cannot say what was taught, you will struggle to say why it was education rather than entertainment or networking. Networking can be deductible in its own right when it is business. Call it what it was.

The course you never opened. Payment is not the event. If you are claiming self-education, a completion record is the least embarrassing extra page in the folder.

None of these patterns is automatically fatal. All of them are worse if you discover them in an audit instead of in your own notes.

A checkout habit that keeps June quieter

Before the card goes on a course site, run this, even if you are in a hurry:

• One sentence: how this helps the business I am already in, not the one I might start.
• Am I GST-registered? If yes, will this supplier give me a tax invoice that names GST and an ABN?
• If the supplier is overseas, what will the AUD amount be on the statement, and am I prepared to claim income tax only?
• Is there a cheaper Australian option that produces cleaner paper — a TAFE short course, a CPA or ACS CD event, a library database I already access?
• Have I checked the refund window, and is the invoice in the correct legal name?
• Am I about to upload ID documents to a site I have not read the privacy statement for?

If the sentence is weak, it is a personal course. Pay for it like one. If the invoice will be a mess, buy something that will not be. The skill you need is usually available from more than one aisle — the big platforms, a local RTO, a university microcredential, or a free hour that does not need a BAS code at all.

I have sold courses and I have bought too many. The ones that survive contact with a tax agent are boring to describe: a named program, a dated invoice, a business already trading, a file note written on the day. The ones that become folklore start with a 40-per-cent-off banner and a feeling that the ABN will sort it out. The ABN will not sort it out. It will just sit on the ABR, which is all it was ever meant to do.

If you want a second pair of eyes, use a registered agent. If you want a correction to something we have written here, use the contact path in the privacy policy without attaching your return. We can fix a sentence. We cannot, and must not, do your BAS.