Day 76 - My Boss and GST
Mar. 17th, 2010 10:43 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
wolfsbrideGST stands for Goods and Services Tax. It's charged at source and you either pay it, if you're a consumer or collect and pay it if you're a business person.
For business people, the way it works is, you charge it to your clients but you also have to pay it out when you buy stuff for your business. At the end of the day you subtract off what you've paid out from what you've collected. If you've paid out more than you've collected then the government gives you that portion back. However, that doesn't happen a lot. Not unless your business is zero rated, which means you pay it out but you don't get to collect it. Or you've paid installments against what you might owe.
The ONLY good thing about the business GST is that you don't have to start collecting it until your business revenue hits 30,000. Which is a lot. This is where today's rant comes in.
My boss has this THING about signing people up for GST. Whether they need to or not. For example, today's client. Last year he made 19,000. He's probably not going to make much more than that this year. But she's insisting he should sign up for GST. You'll get to write it off! I HATE THAT EXPLANATION!
You'd write it off regardless of whether you're registered for GST or not! If you spent 105 dollars on your business, you write off 105 if you're not registered for GST. If you are registered for GST, you write off 100 dollars as an expense and the five dollars goes against the GST you collected. She makes it sound like a huge deal. Like you'll get money back if you are GST registered.
What instead will happen is the person will owe regular income tax and now they'll have a nifty NEW tax to pay as well. And on top of that, they'll get a hefty bill from her for the privilege.
It's really sad that these days, you practically have to know everything just to make sure you are in fact getting good advice.
For business people, the way it works is, you charge it to your clients but you also have to pay it out when you buy stuff for your business. At the end of the day you subtract off what you've paid out from what you've collected. If you've paid out more than you've collected then the government gives you that portion back. However, that doesn't happen a lot. Not unless your business is zero rated, which means you pay it out but you don't get to collect it. Or you've paid installments against what you might owe.
The ONLY good thing about the business GST is that you don't have to start collecting it until your business revenue hits 30,000. Which is a lot. This is where today's rant comes in.
My boss has this THING about signing people up for GST. Whether they need to or not. For example, today's client. Last year he made 19,000. He's probably not going to make much more than that this year. But she's insisting he should sign up for GST. You'll get to write it off! I HATE THAT EXPLANATION!
You'd write it off regardless of whether you're registered for GST or not! If you spent 105 dollars on your business, you write off 105 if you're not registered for GST. If you are registered for GST, you write off 100 dollars as an expense and the five dollars goes against the GST you collected. She makes it sound like a huge deal. Like you'll get money back if you are GST registered.
What instead will happen is the person will owe regular income tax and now they'll have a nifty NEW tax to pay as well. And on top of that, they'll get a hefty bill from her for the privilege.
It's really sad that these days, you practically have to know everything just to make sure you are in fact getting good advice.
