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Need to find a tradesman? Learn all about GST (Goods & Services Tax) in Australia, including when it applies and how it affects you.
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When you find a tradesman to handle work around your home, it's essential to understand how the Goods and Services Tax (GST) impacts the services you receive. GST is a tax of 10% on most goods and services sold in Australia.
This blog tackles GST, but there's so much more to consider! Our ultimate guide provides a roadmap to help you find a tradesman for any job.
GST is a broad-based tax of 10% on most goods, services, and other items sold or consumed in Australia. The Australian Taxation Office (ATO) requires businesses with an annual turnover of $75,000 or more to register for GST. These businesses must obtain an Australian Business Number (ABN) and include GST in their prices.
For smaller businesses with a turnover under $75,000, GST registration is optional. These businesses can still obtain an ABN but are not required to charge GST.
How to Check if a Tradesman Charges GST
To determine if a tradesman charges GST, you can look up their ABN on the Australian Business Register: abr.business.gov.au. This search will show whether the business is registered for GST. Most tradies in Australia will charge GST, but there are exceptions, especially among smaller operations.
What Happens if a Tradesman Isn't Registered for GST?
If a tradesman should have registered for GST but failed to do so, complications can arise. The ATO requires these businesses to remit GST from the date they were supposed to register, even if they didn't charge GST on their invoices. This can lead to unexpected liabilities for the business, and potentially, additional costs being passed on to customers.
How GST Affects Your Costs
When you hire a tradesman who charges GST, the GST amount should be clearly stated on your invoice. For example, if the cost of a service is $1,000, an additional $100 (10% of $1,000) will be added as GST, making the total $1,100. This transparency helps you understand the true cost of the services rendered.
Understanding GST is crucial when you find a tradesman to work on your home. Most tradies will charge GST, and knowing whether your tradesman is registered can help you avoid unexpected costs and ensure compliance with tax regulations. Always verify ABNs, ask for GST-inclusive quotes, and keep detailed records to make the process smooth and transparent.
By being informed about GST, you can make better decisions and ensure that your home improvement projects are financially manageable and compliant with Australian tax laws.
Ready to take the next step? Check out our comprehensive guide for everything you need to know on how to find a tradesman.
