The Goods and Services Tax influences the way we do business and the cost of products, fees and services … and also cash flow. Consider this when budgeting, costing and planning projects and fees.
It has been around a while now (since July 2000) but, on occasion, still causes some confusion. So, here are a few things to consider:
- Confirm if quotes do or do not include GST. This is especially important when talking to suppliers, subcontractors and builders,
- Make sure the GST is clear in any Provisional Sums or Prime Cost Allowances,
- Isolate the GST when reporting costs or budgets (I like to put it clearly at the very end of any report or calculation – rather than bury it in the middle),
- Commercial (or business) and non-commercial clients treat GST differently,
- To Business it is a cash flow issue but usually not a cost, (It does need to be paid, but usually it can be claimed back),
- To residential clients (i.e. mum & dad) GST is a cost,
- e. A Budget of $1,000,000 for a University project, for example, usually means $1,000,000 plus GST.
- But, a budget of $1,000,000 for a house, usually means $1,000,000 including GST – but it is, of course, worth checking.
In Australia the GST adds pretty much 10% to the cost of residential projects.