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Thread: Gst

  1. #1
    Member wceagles1's Avatar
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    Default Gst

    Sorry people have searched long and hard on previous dicussions here and cant locate.

    So here goes.

    Unfortunately i have gone well over the GST limit in turnover in my third year and now have the task of hiting clients up with a 10% increase in pice,as i work hard and do long hours and dont want to take a 10% pay cut and i have to cover a significant increase in my 3 month provisional tax.

    Woulld really welcome any advice from people who have been in the position i now find myself in.

    At the end of the day,starting from scratch was fun,now its got serious.

    Kind regards

    West Coast Eagles 1

  2. #2
    Senior Member seliment's Avatar
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    Default Re: Gst

    It's one of the things you have to be on the watch for.
    Starting off as a "micro business" and operating under the tax radars then when you get bigger it can hit home ...

    However, it's not quite a bad as you think as once you are registered gor gst (and collect it), you can claim the gst back on all of your input costs.

  3. #3
    Senior Member glassngrass's Avatar
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    Default Re: Gst

    I doubt there is anybody on this forum qualified to advise you on this.
    AS a bookkeeper and qualified BAS agent, my advice is - get your tax done by an accountant.

    For everybody else - the law is not "once your income reaches $75K in a financial year", but rather -
    "When income is ANTICIPATED to reach $75K in ANY 12 month period you need to register".

    So if your CURRENT monthly income is getting toward $6,000 then you should be looking to register - or at least speaking with your accountant or tax agent about the subject.
    David
    Mr Sparkle Car Spa

  4. #4
    Senior Member Lawn Mowing Professionals's Avatar
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    Default Re: Gst

    Quote Originally Posted by wceagles1 View Post
    Sorry people have searched long and hard on previous dicussions here and cant locate.

    So here goes.

    Unfortunately i have gone well over the GST limit in turnover in my third year and now have the task of hiting clients up with a 10% increase in pice,as i work hard and do long hours and dont want to take a 10% pay cut and i have to cover a significant increase in my 3 month provisional tax.

    Woulld really welcome any advice from people who have been in the position i now find myself in.

    At the end of the day,starting from scratch was fun,now its got serious.

    Kind regards

    West Coast Eagles 1
    i'd be carefull... you have actually broken the law and stated that you have! As David mentioned, speak to your accountant (if you do tax yourself, call the ATO and ask all the questions and register)

    I'm assuming that you are asking for advice here regarding how to approach your clients now that you will need a 10% price increase as a result?

    Personally, If your prices are already around market rates (and the clients know this) I would take the initial hit of paying the GST component until better weather to break the news... Sept/Oct when lawns are actually growing. Alternatively, if your market is now "limited" with contractor's it could be a good time as limited "beer money bob's" will be learking around offing a better deal.

    If you have a good solid business with exceptional customer service it shouldn't be an issue to the majority if you explain the situation.

    My advice if you are concerned... do 5 different flyer drops to your existing clients (one every week) with 5 different prepaid numbers that you can monitor... If the client calls you know, and second you wont be answering it so looks like really bad customer service... you could get someone to answer and quote over the phone approx. $100


    I'm sure you will work it out, and hope this is what you were asking for.

    Simmo.

  5. #5
    Senior Member geoff's Avatar
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    Default Re: Gst

    You could apply the gst component to businesses straight away ( assuming that you have registered for gst ) as they can claim it back on their bas . Customers private you probably wise to wait till spring but as said before watch the market prices....don't forget though you can claim tax credits from r your purchases on your 3 monthly Bas.

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    Default Re: Gst

    Wear the 5% loss off net income in my opinion. Price all new jobs accordingly to test the market.

  7. #7
    Senior Member glassngrass's Avatar
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    Default Re: Gst

    Quote Originally Posted by geoff View Post
    You could apply the gst component to businesses straight away ( assuming that you have registered for gst ) as they can claim it back on their bas . Customers private you probably wise to wait till spring but as said before watch the market prices....don't forget though you can claim tax credits from r your purchases on your 3 monthly Bas.
    Don't even think about charging GST (or saying that GST is included in the price, until you have registered for GST.

    You can't choose to apply GST to commercial while not applying to domestic clients... you are either registered for GST or you aren't....
    David
    Mr Sparkle Car Spa

  8. #8
    Senior Member fairdinkum's Avatar
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    Default Re: Gst

    I think what Geoff was getting at was that businesses shouldn't have a problem if you start adding 10%. But with residentials you may need to absorb the cost for a while (i.e. don't add the 10%, just make your current prices GST inclusive)

    Jason Forrest
    Fair Dinkum Lawn & Garden Care
    Servicing St Clair, Erskine Park, Colyton, South St Marys
    0407 435 642


    fairdinkumlawns.com.au

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  9. #9
    Senior Member geoff's Avatar
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    Default Re: Gst

    Quote Originally Posted by fairdinkum View Post
    I think what Geoff was getting at was that businesses shouldn't have a problem if you start adding 10%. But with residentials you may need to absorb the cost for a while (i.e. don't add the 10%, just make your current prices GST inclusive)
    thanks mate you do put it the correct way lol...When i moved to GST years ago i in fact passed on the gst to all commercial and many of my residential,I did lose a couple but they were pitas anyway,the only ones i didnt raise was the ones i either just put up the prices or any newbies i got in the last 12 months.....But as David said make sure you are registered first ( i in fact did say that too )

  10. #10
    Senior Member glassngrass's Avatar
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    Default Re: Gst

    Rather than keep prices same but GST inc for domestic and adding 10% for commercial - instead, add 5% to rate for everybody.... small increase should not affect domestic work, and you become much more desirable for commercial clients...indeed, this is where the money is cos they will have you all year around, and as long as you do a good job and are reliable, you may rarely need to speak with them either !
    David
    Mr Sparkle Car Spa

  11. #11
    Member wceagles1's Avatar
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    Default Re: Gst

    Thank you to all for your advice

    1,The book keeper advised the accountant that i was about to go over the $75k GST Threshold

    2,The accountant then registered the business for GST

    3,Hence,Simmo i have broken no law as i have been advised i had 21 days to register.

    4,The 5% increase instead of a straight up 10% is the solution i think my clients can absorb,over and above the accountants intructions to the book keeper just to add 10% on all accounts,so thankyou.

    5,Setting up the business from scratch was good fun and to any of the newbies out there,enjoy the moment and have fun,i did. and miss it

    5,On a lighter note Simmo ,as your from Ballina how would i go trying to line up 1 days work a fortnight in Yamba/Illuka,and make it a long weekend every fortnight,i may be dreaming but thats what i would like to do in time,this is the ultimate .

    Kind Regards

    West Coast Eagles 1

  12. #12
    Senior Member Lawn Mowing Professionals's Avatar
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    Default Re: Gst

    Quote Originally Posted by wceagles1 View Post
    Thank you to all for your advice

    1,The book keeper advised the accountant that i was about to go over the $75k GST Threshold

    2,The accountant then registered the business for GST

    3,Hence,Simmo i have broken no law as i have been advised i had 21 days to register.

    4,The 5% increase instead of a straight up 10% is the solution i think my clients can absorb,over and above the accountants intructions to the book keeper just to add 10% on all accounts,so thankyou.

    5,Setting up the business from scratch was good fun and to any of the newbies out there,enjoy the moment and have fun,i did. and miss it

    5,On a lighter note Simmo ,as your from Ballina how would i go trying to line up 1 days work a fortnight in Yamba/Illuka,and make it a long weekend every fortnight,i may be dreaming but thats what i would like to do in time,this is the ultimate .

    Kind Regards

    West Coast Eagles 1
    I was just going off your initial post as it wasn't "clear" that you had registered (probably why you had the initial posts from everyone advising you how to register!). Going "WELL OVER" is slightly different to just approaching the limit...

    Just curious, the component that you are well over the $75K threshold, do you know if you still need to pay the GST?

    It's good to see that you have everything under control with your business.

    BTW - I'm not from Ballina and suggest that you ask simo that question.

    Simmo.

  13. #13
    Senior Member Lawn Mowing Professionals's Avatar
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    Default Re: Gst

    Quote Originally Posted by wceagles1 View Post
    Thank you to all for your advice

    1,The book keeper advised the accountant that i was about to go over the $75k GST Threshold

    2,The accountant then registered the business for GST

    3,Hence,Simmo i have broken no law as i have been advised i had 21 days to register.

    4,The 5% increase instead of a straight up 10% is the solution i think my clients can absorb,over and above the accountants intructions to the book keeper just to add 10% on all accounts,so thankyou.

    5,Setting up the business from scratch was good fun and to any of the newbies out there,enjoy the moment and have fun,i did. and miss it

    5,On a lighter note Simmo ,as your from Ballina how would i go trying to line up 1 days work a fortnight in Yamba/Illuka,and make it a long weekend every fortnight,i may be dreaming but thats what i would like to do in time,this is the ultimate .

    Kind Regards

    West Coast Eagles 1
    I was just going off your initial post as it wasn't "clear" that you had registered (probably why you had the initial posts from everyone advising you how to register!). Going "WELL OVER" is slightly different to just approaching the limit...

    Just curious, the component that you are well over the $75K threshold, do you know if you still need to pay the GST?

    It's good to see that you have everything under control with your business.

    BTW - I'm not from Ballina and suggest that you ask simo that question.

    Simmo.

  14. #14
    Senior Member St George's Avatar
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    Default Re: Gst

    what if you have a crazy month and earn 6 or 7000 dollars but you are averaging say 4000 previously ,does that mean that i have to register for G.S.T.

  15. #15
    Senior Member glassngrass's Avatar
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    Default Re: Gst

    If you ANTICIPATE your receipts for a twelve month period will exceed $75,000, then yes, you should register.
    That twelve month period is not just from now, but from any period starting a year ago.
    eg. Your turnover is $1,000 a month, eleven months later you anticipate $65,000 turnover in the twelfth month then you must register in that twelfth month.
    If, however, you expected that big twelfth month turnover at the start of the year, then you need to register at the start of the year.
    If you anticipate turnover to meet/exceed $75,000 in ANY twelve month period you need to register...
    David
    Mr Sparkle Car Spa

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