which is on your INCOME or PROFIT after your expenses/costs are subtracted etc
which is on your INCOME or PROFIT after your expenses/costs are subtracted etc
I'm going with a similar theory to Happy.
Also re income tax, my accountant said to try to put away about 20% of my weekly income in a separate account to cover any tax payable at years end. It's easier said than done though.
Anything Ian says may or may not be garbage, it may also be his own opinion or it may not be his opinion at all, it may just be something he felt like stating anyone following his advice does so at their own risk and may be doing something Ian would actually advise against.
And if you don't like what Ian has to say use the ignore function if you don't know how ask i will gladly tell you
True, which is why, if you use an invoice book like the one I use, and the page says TOTAL INCLUDING GST you need to cross-out the INCLUDING GST part. Very important to do this.
Thanks Guys. A big help here
not what im saying mate
if youre charging marg $50, and she's willing to pay $55 (whether or not its a gst charge or not) then you put the price up to $55; IF youre ON gst, you lose that money; if youre NOT on GST you KEEP that money
arg, (being a resi customer who cant claim the GST as an input credit) wont care whether or ot YOU have to gove the extra to the govt as GST; she just looks at how much dough out of her purse to pay you - so in theory you could put all your prices up 10%, and keep the extra money.
its NOT GST ; its a price rise.
see my logic?
(i know i got in the poo over this here last time i tried to talk this out - some people just dont UNDERSTAND GST , and the advatage of NOT being on it until you HAVE TO BE - which is when you t/o 75 k)
cheers
This is the point I was making to you last time happy good to see you are now backing it
dont understand ajd; you mean commercial customers kow the difference between gst and non-gst payments (lol, a lot dont, i believe, their accountant would have to point it out and explain it, lol)
but thats what you mean?
(my business is pure resi, so thats what my examples nearly always are based on)
cheers!!!
Happymowin i was thinking about it when i went back to work and thought that may have been what you meant and was going to post something about that but you beat me to it and the other point of charging as much as sdomeone who is registered for GST is that when you go over the 75k you can then hit them for an increase if they object you can always settle on a lower amount or even absorb the entire amount and your still no worse off than others who charge GST
Anything Ian says may or may not be garbage, it may also be his own opinion or it may not be his opinion at all, it may just be something he felt like stating anyone following his advice does so at their own risk and may be doing something Ian would actually advise against.
And if you don't like what Ian has to say use the ignore function if you don't know how ask i will gladly tell you
What I mean Happy and always meant is instead of waiting until when/if you turn over 75k and get registerd for GST and have to put your prices up on all your customers at once prepare now and alow it in your price so when it hapens you absorb it less likely losing customers as oposed to telling your customers they now have to pay gst. when we were going at it last time you didnt understand what I meant but I notice in your posting to Ian you are now backing it..
AJD Mowing from different thread:Happy Mowing Reply:If you you are happy to stay under 75k thats fine but if you want a a big business and a good pay day at the end once you hit 75k you need to register it is up to the individual what they want..
Customers don't just include householders they include business contracts from a wide range of industries that do not mind one bit paying GST infact they expect it... So yes of coarse you add the gst to your rate if your registerd..
If your not registerd and want to earn over 75k then put the gst in your price now.. Yep thats right if you do a $40 lawn then you charge $44 but instead of giving it to the ATO it is part of your income until you need to be registerd. you are preparing for GST, so there you go GST has made you money!!
If you turn up to your customer looking and sounding profesional they don't mind paying an extra few bucks..
Go for it dont let negative minded people bring you down..AJD, well, i reckon if everyone put up their prices 10%, youd lose a heap of business. you try it. you actually absorb the gst in your business, you dont actually charge it to the customer. the cust pays $50 for his lawn whether or not it includes GST.
dont get it? ask your accountant.
and, of course you ultra pro, ultra hard working guys earn more than $75 k a year.
newbies starting out? they wont earn that for a year or two, so not registering for gst would help them out.
you guys just dont seem to get what im trying to say.
if your turnover is over 75K you dont get a choice. if its under 75k you HAVE A CHOICE.
and, geoff, my wife does not work either, and until a year ago i had over $1,000,000 on loan from the bank for my investment properties.
so i think we are doing well, too, even tho i dont "live like a king" lol.
i am just trying to say to guys turning over less than 75k, speak to your accountant and make an informed decision. dont be a sheep.
and for you guys employing someone, turning over more than 75k, maybe have a look at going smaller, turning over less, and taking home more.
certianly working less ours so you spend more time with your family
the last business i was in , we had 12 installers, an estimator, 2 office girls, and 10 promo staff. I can make more money mowing by myself than turning over $300,000 a year in a business like that.
and now i am home when my kids are home, spend lots of time with my wife, doing what i want to do.
the bills and a slab of beer? gee i'm a lot better off than that.
and sometimes i actually work more than 20 hours a week. i used it purely as an example.
raise your rates, do less work for your money, travel less between jobs.
work smart not hard and long.
up to you.
my point is manyfold ajd,
i always say, get as MUCH money as you can for what you do, and dont do things for free (or include extra stuff costing you time for free which is money )
if you put up the price before registering then cant put the price up any more WHEN you register, you in fact ABSORB the gst, - YOU pay it, not the cstomer. the customer doesnt pay any extra
imo youre wasting your time being on gst under 75 k t/o, unless youre making a LOT of capital purchases (new utes, much new machinery, etc) or unless a large component of what you charge is for materials (may be like stripes does for irrigation?) but if your main component of your charge is labour, gst is a rip off.
lets just say we agree, but come at it from different directions.
im happy, youre happy too, lol
and remember you guys starting up, buying all your stuff new - you can register for gst, get all the gst credits back in the first 3 months then de-register, so you keep all the money, dont have to do bas's, and can stay de registered until your t/o goes over 75k (which im sure a lot of guys dont even reach for a lot of reasons, especially if they give up after 6 to 12 months.
eg, new ute 30,000 plus 3,000 GST
equipment 15,000 plus 1,500 gst
in your first bas, if you only bill eg 5,000; spend 1,000 on parts, fuel and advertising,
you only owe the govt $360 gst; but they owe you 4,500 so they PAY YOU $4,140 (yes actually PAY YOU)
THEN you can deregister, until your t/o reaches $75k
and if all along you charge the MAXIMUM you can, youre working the system for you
(please check with your accountant this is all legal, and above board, and get him to do some figures on YOUR situation etc)
on labour only and a bit of fuel, the credit you get from the govt is SMALl< while what you pay them for gst is LARGE.
really, ask your accountant if what i say has any truth.
been dealing with gst for about 9 yrs now; been on it and off it; know some of the pitfalls and ways and means to work it for you.
cheers
If thinking about de registering, just be very careful that you know your customer base. Don't just assume that because it is a resi block, it is not claimed as a business expense, and as such the clients wants to claim an input tax credit. There are a lot of people operating from home, who claim. I don't know if they are legite or not, but you don't want to loose a client because you de register
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the customer themself would have to be gst reg'd for your non-gst expense to worry them, and even then, may not realize or care what it means to them,
at worst using you would cost them the 1/11th of the payment they could claim as a direct gst credit, and they would just claim it all as an expense.
make sense?