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  • #988831
    Cleaner Guy
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    Hi guys,

    Just had a question regarding GST. I have read up threads here but need some clarification. My situation is as follows.

    Customer- requires a cleaning. Pays me
    Me – Receive the money and subcontract the work to someone.
    Subcontractor. Receives a fixed amount from me for completing the work requested by the customer.

    From my understanding if the subcontractor is registered for GST he will add it to the invoice when i am charged. If he isn’t then he will not charge GST on the invoice.

    Two scenarios:
    I am registered for GST – I will pay GST on the full amount given to me by the customer
    a) if the subcontractor is registered for GST i can claim back some tax credits from the GST he charged me?
    b) If he isnt there is no tax credits to claim back

    I am not registered for GST – I pay no gst
    a) if the subcontractor is registered for gst he charges me GST. Since i am not registered for GST i cannot claim tax credits
    b) the subcontractor isn’t registered – He charges me non GST price and i dont pay any GST

    Thanks for your help guys

    #1169119
    James Millar
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    That all seems correct

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1169120
    Cleaner Guy
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    Just to clarify tax credits as well. Assuming i am registered for GST.

    A customer pays me $150 ( I owe tax office $15 for GST)
    I pay subcontractor $100 +$10 GST for performing the service the customer requested.

    From here i can claim back $10 in credit and I effectively only pay five dollars in tax. ($15 -$10=$5).

    Thanks

    #1169121
    James Millar
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    If your customers GST inclusive amount was $150 then the GST in that would be 1/11th = $ 13.63 not $15.

    If you pay the subcontractor $110 then yes the GST input tax credit would be $10

    So you would owe the ATO $ 3.63

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1169122
    Cleaner Guy
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    Thanks for your help James

    #1169123
    James Millar
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    No probs

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
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