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Thread: Avoid GST?

  1. #1
    Junior Member merryfield's Avatar
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    Default Avoid GST?

    Hi all, I am just wondering whether it would be worthwhile running two businesses to avoid the whole GST thing, but I am not sure whether there would be any issues.

    From what I understand, a business can earn $75000 gross income before having to register for GST.
    Presumably if you ran 2 businesses you could earn $150 000

    Of course there would be 2 accountants fees, and possibly 2 Public liability insurances to pay, but if that is the only expense, surely it would be much better than the whole GST hassle.

    Appreciate any advice.

    Mike

  2. #2
    Senior Member m287j's Avatar
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    Default Re: Avoid GST?

    Hi Mike,

    Legally you are not allowed to do what you want to, it is called tax avoidance. Furthermore, if you have two registered businesses with different ABN's the Tax Office would very quickly catch on to you.

    If you want to be a true professional in this industry then you should be GST registered. Furthermore if you want to do work in the real estate and commercial areas most will require you to be GST registered before they even think of touching you.

  3. #3
    Member of Forum haireyscarie's Avatar
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    Default Re: Avoid GST?

    Quote Originally Posted by merryfield
    Hi all, I am just wondering whether it would be worthwhile running two businesses to avoid the whole GST thing, but I am not sure whether there would be any issues.

    From what I understand, a business can earn $75000 gross income before having to register for GST.
    Presumably if you ran 2 businesses you could earn $150 000

    Of course there would be 2 accountants fees, and possibly 2 Public liability insurances to pay, but if that is the only expense, surely it would be much better than the whole GST hassle.

    Appreciate any advice.

    Mike
    lol
    i would not do it but
    for you 2 make the 75 grand .you might have 120 grand and 45 grand in total to run it..
    so the more you spend in the year for your work gear .insurance. fuel.new mower .new trailer .etc etc etc
    ps
    i think i got that right
    []

  4. #4
    Junior Member merryfield's Avatar
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    Default Re: Avoid GST?

    The tax office says you have to register if you have a GST turnover of $75 000 or more.

    I assume turnover means gross business income.

    If the $75 000 is net income after expenses, then I wouldn't have to worry about GST at all.

  5. #5
    Senior Member m287j's Avatar
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    Default Re: Avoid GST?

    Quote Originally Posted by merryfield
    The tax office says you have to register if you have a GST turnover of $75 000 or more.
    Turnover is what is says, turnover. It is the total of all income and expenses incurred in making that income. It is not nett income.

  6. #6
    lifestyle
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    Default Re: Avoid GST?

    hmmmmm, $75,000 a year and worrying about GST ?

    If your registered for GST and you pay more GST than you collect, you do realise you get the difference back don't you ?

    Also, if you need to pay GST, the amount you pay is NOT the amount you collect from clients / customers.

    If your business purchases included $120 GST and you collected $135 in GST from sales and services then you only pay $15 to the TAX department ($135 - $120 = $15 payable).

    If you reverse that and you spent $135 in GST included purchases and collected $120 from customers then YOU would get $15 back.

    GST would probably be the better of all the tax systems out there.

  7. #7
    Translawner administrator's Avatar
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    Default Re: Avoid GST?

    Gst limit was 50000 a few months ago now its 75000 theres a blessing in its selve for small business .

    Gst is a tax and it helps run the country

    You stll live in the best country in the world and will remain so because of the people that live here .

    Please Support The Sponsors www.lawnmowingdirectory.com.au

    As they support this forum




    Carrum downs Dandenong Doveton

  8. #8
    Member geejay's Avatar
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    Default Re: Avoid GST?

    circumnavigate it if you have to when you start,you paid gst on trailer etc,pay on fuel,it will give you adge,once running,gst register for this great country.
    geejay

  9. #9
    Senior Member glassngrass's Avatar
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    Unhappy Re: Avoid GST?

    [QUOTE=lifestyle]
    If your registered for GST and you pay more GST than you collect, you do realise you get the difference back don't you ?
    QUOTE]
    If the above is the case, then you are running at a loss!!!

    Some run two buisinesses - a sole proprietor for one set of activities, and a partnership (with missus) for another. If you did gardening for both you would likely be caught and deemed a tax avoider and penalised/fined/incarcerated accordingly.

    Commercial work is the way to go, and being able to claim GST back makes is easier to charge that little bit more.

    I started without GST and then registered as I grew. Wish I had registered straight away because in my first year I wrote off a lot of new equipment valued under $1,000 each under the Simplified Tax System (cash accounting). This would have meant I could have claimed back the GST component on a heap of stuff (vehicle, trailer, mower, edger, blower, brushcutter, chainsaw, etc....) This could have saved me $1,500 in GST credits easily.
    David
    Mr Sparkle Car Spa

  10. #10
    lifestyle
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    Default Re: Avoid GST?

    Yeah you would be running at a loss in that case. But you can off set the amount you actually pay by claiming credits for the amount you spend.

    Running at a loss is worst case scenario.

    This can often be the case though if you start with next to nothing and buy new gear as you go.

  11. #11
    Senior Member glassngrass's Avatar
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    Default Re: Avoid GST?

    Which is why I should have registered for GST my first year, wrote of a heap of new equipment (under $1,000 each item doesn't have to be depreciated, but can be written straight off). Then I would have got the GST straight back and reduced my first year operating loss.
    David
    Mr Sparkle Car Spa

  12. #12
    Senior Member Bgs's Avatar
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    Default Re: Avoid GST?

    Hi Glassngrass,

    When you registered for GST did you put your prices up ie a $35 lawn is now $38.50 or did you make it $35 in Gst.

    Thanks

  13. #13
    Member bks07's Avatar
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    Default Re: Avoid GST?

    hi Bgs

    Put gst on top or you have to pay the gst out of the $35 if you don't you will be giving money away to the tax man and $35 lawn then becomes 31.82 for you and the rest is the tax mans

  14. #14
    Senior Member geoff's Avatar
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    Default Re: Avoid GST?

    thats true but also u get offsets from the purchases which helps i guess...we found that business didnt care because they can claim it back but if u have just put up your prices then tell the customer they have another rise in the gst ...gets difficult.. I think if u plan your rises with gst inclusion it should soften the bite...most people understand that tax and that other thing are always there

  15. #15
    Senior Member gjs's Avatar
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    Default Re: Avoid GST?

    Don't forget to read up on GST and the sale of items you get the GST rebated for, because the taxman puts his hand again if you resell the machinery. I guess vehicles would be big one also expensive ride ons.

    gjs

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