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  • #969096
    Goatboy
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    Performed some work as a sole trader (registered an ABN, didn’t register for GST). Invoiced the client, who complained about GST not being present on the invoice, after insisting that as a non profit they had to pay the GST. Obligingly added 10% and reissued the invoice, which the client promptly paid.

    So now it’s tax time and I’m slowly beginning to realise that they were almost certainly wrong about the GST and that I should not have charged them for it. As someone not registered for GST, am I still able to pay it, and if not, should I be issuing a refund to the client?

    #1036890
    Urchin
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    I had clients complain all the time that something was wrong with my invoices because I didn’t have GST and my invoice stated ‘Invoice’ rather than ‘Tax invoice’. The complaints subsided once I added ‘No GST has been charged’ to the bottom of my invoices.

    You are right that you shouldn’t have collected GST if you were not registered for it. You also don’t need to register for GST unless your income from the current month + prior 11 months or future 11 months is greater than 75k. I don’t see a problem with refunding the GST portion but it may be a little embarrassing contacting your previous clients and changing things. I’m no expert so I’ll leave it to someone else to give a more qualified response.

    #1036891
    Integrated Alliance
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    Goatboy, post: 44491 wrote:
    Performed some work as a sole trader (registered an ABN, didn’t register for GST). Invoiced the client, who complained about GST not being present on the invoice, after insisting that as a non profit they had to pay the GST. Obligingly added 10% and reissued the invoice, which the client promptly paid.

    So now it’s tax time and I’m slowly beginning to realise that they were almost certainly wrong about the GST and that I should not have charged them for it. As someone not registered for GST, am I still able to pay it, and if not, should I be issuing a refund to the client?

    Hi,

    Interesting case, and one which surprisingly does come up quite often.

    In the case where you have incorrectly charged a client GST when you yourself were not registered, then you are required to reimburse the overcharged amount to all clients (this includes customers not registered for GST).

    If the BAS relating to that invoice has been lodged, then you can actually make the correction on a later (current) BAS as long as 1) your turnover is under $20M, which I assume would be the case, and 2) the correction is under $5,000.

    In your case, since you are not registered for GST, then the correct action to take is to reimburse the client.

    Hope this answers your question, let me know if you need clarification.

    Cheers,

    Andrew

    Andrew Lowe
    Director
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    Integrated Alliance Pty Limited
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