Home Forums Starting your journey GST – the missing answer

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  • #1000317
    NickiClarke
    Member
    • Total posts: 2

    Hi Everyone

    Sorry if this question seems like it may have already been covered but everything I have read just stops short of answering what I need to know.

    My husband has just started a small business and at this point in time we dont project that he will meet the $75,000.00 GST turnover amount to bother registering for GST.

    My question is if a month or a few months into this new adventure things pick up and we look like meeting the $75,000.00 figure in our first year and then register for GST (within 21 days) will we be expected to pay GST for work completed pior to registering?

    cheers

    Nicki

    #1223855
    Rowan@quaotic
    Participant
    • Total posts: 712

    You don’t have to get to the $75,000 figure for it to be a good idea to register for GST. If you have inputs for your business such as tools, stock, tech, stationary, anything that you pay tax on, then it is worth your while to register to claim back that tax.
    The registration and filling out BAS is so easy that there really isn’t advantage to not doing it and every dollar you get back adds up.

    #1223857
    NickiClarke
    Member
    • Total posts: 2

    Thank you for replying Rowan. :)

    The one issue we currently have is that we agreed on an hourly rate with one of our customers and he is now pushing for us to be registered for GST but wont budge on the hourly rate. This would mean we will lose out as we will need to pay the GST whilst he will be better off due to claiming the GST on the original rate agreed upon. As this is currently our main income whilst we build up customers this will have a bit of an impact.

    So if we dont register until we build up our customer base we are in front but if we would then need to back pay GST on invoices we have not charged GST on it will have a negative impact.

    #1223858
    JamesMillar
    Participant
    • Total posts: 1,676
    NickiClarke, post: 270572, member: 68450 wrote:
    Thank you for replying Rowan. :)

    The one issue we currently have is that we agreed on an hourly rate with one of our customers and he is now pushing for us to be registered for GST but wont budge on the hourly rate. This would mean we will lose out as we will need to pay the GST whilst he will be better off due to claiming the GST on the original rate agreed upon. As this is currently our main income whilst we build up customers this will have a bit of an impact.

    So if we dont register until we build up our customer base we are in front but if we would then need to back pay GST on invoices we have not charged GST on it will have a negative impact.

    That’s a commercial decision but basically you are saying your customer wants a 10% discount. Tell them that’s fine but you can only do 90% of the job

    #1223859
    Paul – FS Concierge
    Moderator
    • Total posts: 3,127
    JamesMillar, post: 270591, member: 5318 wrote:
    That’s a commercial decision but basically you are saying your customer wants a 10% discount. Tell them that’s fine but you can only do 90% of the job

    To be fair, if the customer assumed that the business was registered for GST and the customer is also already registered for GST, they may well have been acting in good faith when originally accepting the price.

    If I was the original poster, I would have a good faith discussion with the customer about the price.

    #1223860
    DF_QLD
    Member
    • Total posts: 3

    The hourly rate just becomes +GST

    Simple.

    #1223861
    UmarBatchelor
    Member
    • Total posts: 26

    It is possible he just needs an ABN because not having your client’s ABN might attract withholding tax. I agree with [USER=78928]@Paul – FS Concierge[/USER] . Have a good discussion with your client about the price and why he wants you to register for GST.

    https://www.ato.gov.au/Business/PAYG-withholding/Payments-you-need-to-withhold-from/Withholding-from-suppliers/Withholding-if-ABN-not-provided/#:~:text=Withholding%20if%20ABN%20not%20provided%20If%20the%20supplier,until%20they%20have%20obtained%20and%20quoted%20their%20ABN.

    #1223862
    deb.r
    Participant
    • Total posts: 1
    NickiClarke, post: 270568, member: 68450 wrote:
    Hi Everyone

    Sorry if this question seems like it may have already been covered but everything I have read just stops short of answering what I need to know.

    My husband has just started a small business and at this point in time we dont project that he will meet the $75,000.00 GST turnover amount to bother registering for GST.

    My question is if a month or a few months into this new adventure things pick up and we look like meeting the $75,000.00 figure in our first year and then register for GST (within 21 days) will we be expected to pay GST for work completed pior to registering?

    cheers

    Nicki

    Hi Nicki,

    I’m a Bookkeeper, and I can confirm that you only need to pay GST from the date you registered. (see: https://www.ato.gov.au/Business/GST/Registering-for-GST/#Whentoregister1 for more info)

    I agree with [USER=78928]@Paul – FS Concierge[/USER] about having a friendly discussion with your client about the price in your quote.

    If you’d like to chat more with someone who deals with this kind of thing all the time, feel free to reach out to me – I’m happy to help!

    All the best!

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