How To Manage Your GST
I made this video for Michael, he asked if I had any guides on managing GST on the dope so I said I’d write one for him.
These terms are for Australians and our 10% goods and services tax on our quarterly requirement to collect the GST and prepare to our tax office translate it for your country, you know the pounds and the New Zealanders is going to be very similar.
Let’s deal with simpler than you think first. You can get caught up trying to understand your costs for something, let’s think about materials for a job perhaps. You get your cost and it’s got GST added onto your invoice and then you’ve got your sale price and you’ve got that including and excluding GST and then trying to understand your margins properly and things like that like and how much you should be paying, how much you should be charging, so my advice is don’t.
Don’t do that. Calculate your costs without trying to factor in the GST and add your margin and calculate your sale prices without factoring into GST and then on your quote on your invoice show two prices right. Show the price excluding GST, show the GST of course which isn’t the price and then show the price including GST which is what your customer is going to pay and the bit that you get is the excluding GST price and the bit of GST that you collect and give to the tax office is the GST part.
The GST kind of sorts itself out so don’t worry about it, you don’t need to funny about trying to understand your costs inclusive in GST just do the whole exclusive thing and then add GST onto your invoice. Buy the materials and pay the GST and you sell your service including those materials and you collect GST.
When you calculate how much GST to pay at a bad time, you calculate how much GST you collected and how much GST you paid and you pay the tax office the difference. So don’t try to get or don’t get confused rather with GST included and excluded do it all excluding add GST at the end and open a separate bank account, we can call it GST and transfer the 10% GST that you put on every invoice into it when you get your invoices paid, come first time you’ll have enough to pay your best and you’ll have some leftover which might happen.
That’s my advice.
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