Thursday, September 19, 2013

Online Connections has now deregistered from GST.

After quite a while of flip-flopping, I've decided to deregister Online Connections from GST. Effective from the 17th of September I will no longer be charging GST.

When GST was introduced the effect was to take my hourly rate and then add 10%. For large businesses this made no difference as they could claim back the GST, but for smaller businesses who weren't registered for GST, and for home users who could not claim the GST back, this simply meant quite a significant price increase with no real benefit.

One thing recently stood out in my mind which ate at me. One person said they wouldn't deregister from GST. They get to claim back GST on their expenses and the customer pays the GST so it doesn't matter. It is the 'customer pays GST so it doesn't matter' that bothered me. I once worked for a chartered accounting firm and as expected from accountants, they'd look for every way to minimise their expenses, but if a client had to pay for something, cost was no issue. The cost was not borne by the chartered accounting firm, but was passed onto the client so there was little incentive to reduce client costs. I've seen the same behaviour across a number of organisations which call themselves professionals such as real estate agents and doctors and I don't personally think it is right.

My approach is simple. I try to do the best I can by my clients. If I can reduce a cost for a client I will. Businesses registered for GST will be no worse off because I'll have simply reduce my rate by the GST amount. Those business not registered for GST and home users will now benefit from the reduced rate. The only real loser in the situation is myself as I can no longer claim back the GST portion of expenses. I can live with the increased cost.

Please bear with me as I update the parts of my online presence and in-house systems to reflect the removal of GST. All consulting activities and JustLocal will have reduced prices. The Australian dictionary products are low priced products and the prices won't change. This does mean an effective increase for those who could claim GST, but that should not overly effect many people.

Kelvin Eldridge
Online Connections
Call 0415 910 703 for computer support.
Servicing Templestowe, Doncaster, Eltham and the surrounding area.

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