Paying sub-contractors registered for GST

If you are unregistered for gst you cannot charge it on invoices and you cannot claim it from subcontracts that have a gst component.

That means that all gst paid on any subcontract invoices needs to be considered as part of the cost.

Your invoices will not show the gst component from the subcontracts
 
(i) I quoted for a job and on my quote the total is $12k. (Is it correct that on my quote I need to put total as $12k Excl. GST? )
I don't think so. Ex GST may imply that GST is applicable when it isn't. When you invoice the amount due, it will just be an "Invoice" not a "Tax Invoice" and should include a statement to the effect of this invoice includes no GST or maybe "Not registered for GST". ATO might be able to advise on the exact wording.

https://www.ato.gov.au/Business/Man...r-invoices/If-you-are-not-registered-for-GST/

(iii) Subcontractor A is not registered for GST so I need to pay him $5k.
I think that is right.

(iv) Subcontractor B is registered for GST, therefore I need to pay him either $5k + GST or $5.5k Including GST.
Check the invoice. It should have a statement that the $5k includes GST or excludes GST. If the $5k includes GST you pay $5k. If the $5k does not include GST you pay $5.5k.
 
Is there any benefit of not being registered for GST?

After doing some research, it looks like registering for GST is the way to go as I cannot see any benefit of not being registered.

If someone is registered for GST, at least he can claim GST back.
 
Spykey this is not my opinion or recommendation and actually a huge generality but I have had landlords in the past ask me to source non gst registered trades people and handy men.

The perception (although not always correct) is that they will save 10%.

In reality however I have compared quotes where a gst registered person is more cost effective.

The fact that there is a perception that you are cheaper could work in your favour - assuming off course that this is the image you want to portray.

Keep in mind that gst on properties (in sa at least) cannot be claimed by investors so it does just add to the cost. That's why some landlords want to get quotes from non gst registered people.

On the other hand however, this is not a strong argument for it and unless someone can come up with something better, being gst registered looks like it has more benefits.
 
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