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Thread ID: 41575	2004-01-15 07:58:00	[OT] Tax Advice	Lohsing (219)	Press F1

Post ID	Timestamp	Content	User
207639	2004-01-20 12:22:00	To claim GST you have to be able to quote the GST number of your supplier.	mikebartnz (21)
207640	2004-01-20 20:35:00	>(they, of course, can claim it back) >>If they aren't charged it they have nothing to claim back. Their system's are all setup for it anyway. If you don't charge it, they will often question it, as 99% of their suppliers will charge it also. >Who do you work for. Umm, not the IRD. I suppose I was speaking tongue-in-cheek in the first person. I got a nice letter the other day which rubbed me up the wrong way :p	Dolby Digital (160)
207641	2004-01-20 22:45:00	Although this has been covered pretty well, can I just point a couple of things out: 1. An invoice from a non-registered person means the buyer can deduct one ninth of the total value as imputed gst. This sort of means the buyer saves a ninth on the cost, but isn't all plain sailing. 2. Once you register for gst, you could be filling out zero value six monthly returns for the rest of your life. Getting off is not easy. 3. If you want to claim costs associated with the income (pc depreciation, mileage, etc) you need to do a full set of accounts and for a low-value project it is not worth it. If you can charge the client for obvious out-of-pocket expenses that would be better. 4. The client should probably deduct wihtholding tax from your payment and remit it to the revenue, and could be held liable if they don't. I don't remember the prevailing rates but it is likely to be 20-30%. The rates vary for certain activities but the rate is lower when there is an expectation that the invoicing party will have expenses to claim against the income. They do it on interest in your bank account now. The good news is that this withholding tax minimises any "oh ****" tax bill at the end of the financial year. 5. Ensure you have kept enough aside to pay the tax you owe. I've seen too many nightmares where people don't. It can bankrupt people and worse when the numbers get large. (By way of an explanation, I may be a geek, but am also a qualified accountant and do occasionally act like an accountant.) robo.	robo (205)
207642	2004-01-21 08:12:00	> (By way of an explanation, I may be a geek, but am > also a qualified accountant and do occasionally act > like an accountant.) Some people grow more scary every day :^O Mike.	Mike (15)
207643	2004-01-21 08:36:00	Whats scary is the gst form i recieved in the mail today. I aint even gonna open it. Im thinking of burning it and going bush.	metla (154)
207644	2004-01-21 08:51:00	> Im thinking of burning it and going bush. The IRD would hunt you down anyway :) Mike.	Mike (15)
207645	2004-01-21 09:13:00	They have agent orange that they got cheap for people who go bush. robo.	robo (205)
207646	2004-01-21 09:42:00	robo said: >4. The client should probably deduct witholding tax from your payment and remit it to the revenue, and could be held liable if they don't. (snip) Whether or not withholding tax is deductible depends on the nature of the work you are doing. Workers like jockeys and actors for example are specifically covered by the withholding tax regulations. An extremely well known international accounting firm who were managing a client's payments to me before I became GST registered tried to insist on deducting withholding payments from my cheques despite the fact that the nature of the work I was doing did not come within any of the prescribed activities. I had to sic the Inland Revenue on to them because they would not believe me (what would I know - they are famous accountants). All they had to do was to read the back of the withholding tax form to see that I and my work didn't fit into any of the categories. I suggest that you would be wise to get a copy of the withholding tax form and explanatory material from Inland Revenue and look at the categories to see if you come within them. Don't be frightened of Inland Revenue if you are straight with them - they have been amongst the best sources of tax advice that I have had, and they have provided me with really good support (prior to my GST registration) when this sort of issue came up for me quite a lot. The only time when IR have been utter s..ts has been when they have twice failed to credit my GST or provisional tax cheques that they have banked and then they came heavy saying I hadn't made my payments. I also got hit by them when they said I had paid my GST two days late. They backed down on each of these occasions, but I had to be very very assertive. The money people down there are not my favourite people because they just act like robots, but the customer service people who give tax advice are excellent (this is only based on my experience).	John H (8)
207647	2004-01-21 09:47:00	One more thought - my experience is that no-one had/has a problem with my tax status when I was on PAYE and now that I am GST registered, and your post has reminded me of past repetitive and distasteful debates with the people who managed client payments to me. I had to get a letter from Inland Revenue to try to head them off at the pass. No-one seems to understand a person who is neither on PAYE or GST registered. That is how the withholding payment thing keeps rearing its ugly head, because people think they have to deduct tax from everyone. It is much more peaceful now that I am GST registered... I had forgotten those times until I read your post. Sigh... John	John H (8)
207648	2004-01-21 10:54:00	I don't think it matters what industry you are in, the withholding tax is there for situations where the invoicing party is considered to need source deductions. It tends to be startups and very small businesses. Had the same issue myself a long time ago. Once you are considered to be a proper business it disappears quickly. Unlike non-resident withholding tax, but let's not go there. robo.	robo (205)
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