Transport Services Licence
thl holds the Transport Services Licence (TSL) that allows you to hire out your vehicles to Guests with Mighway. This saves you the hassle of applying for your own licence. The Terms and Conditions you agree to when listing your vehicle mean you will operate under our licence when renting out your vehicle with Mighway, unless you hold your own license.
If you use our license: Mighway/thl has a two tiered contractual arrangement, 1) between Mighway and the Renter when vehicles are rented under our TSL, and 2) between Mighway and the Owner when they are paid for use of their vehicle.
As Mighway/thl is in the middle of all transactions, GST is applicable on all bookings between Mighway and the customer. This means that GST must be deducted from the amount paid by the customer before splitting the remaining amount between Mighway and the owner. Mighway handle any paperwork and registration you need to rent your vehicle commercially. As an owner, you will need to maintain private vehicle insurance and a Certificate of Fitness for your Vehicle.
If you hold and use your own TSL: Mighway is able to pay you for your bookings GST inclusive, and it then becomes the responsibility of the Owner to pay the GST yourself. This change comes into effect for any completed bookings from 1st July 2017, provided we have a copy of your TSL at least 5 working days prior to the 10th of the month. As an owner, you will need to maintain private vehicle insurance and a Certificate of Fitness for your Vehicle.
How does our TSL work?
"When we (thl) created the Mighway business model we took the view that for the benefit of our Owners, it made sense to operate Mighway under the thl TSL. What this meant was we had to create the terms and conditions in such a way whereby the Owner is contractually renting the motorhome to thl and in turn thl is renting the motorhome to the Guest. Given our chosen path, what it means from a GST perspective is mighway (thl) must pay GST on all rental income collected from guests (given thl is GST registered), which is then paid through to the IRD. This is required to occur on all transactions whether you are GST registered or not. As such, we net this off the rental income collected and then remove our commission. If you are GST registered you are able to reclaim the GST component that we have netted off."
-Dave Simmons, COO
How do we handle GST?
All GST registered owners, or owners using their own TSL, should be getting the full GST inclusive portion of the hire & service fee and then passing on the GST through your GST return. So, if you are a local owner with a van hire for $1000 and $100 cleaning fee, you will receive $850 for the hire and $85 for the cleaning fee. If you are not GST registered, you will get those amounts less 15% GST. Please see the table to easily compare this as well.
For GST Registered Owners
If the Owner is GST Registered, Mighway will pay GST on to the Owner. It’s the Owners responsibility to then pay GST to the IRD. Currently Owners need to provide an invoice, but we are working on a solution to have buyer-created invoices once the IRD have approved this.
GST on Owners Payment
All pricing on the Mighway platform is GST Inclusive. If the Owner is Non-GST Registered, Mighway is obligated to deduct and remit GST on your behalf to the IRD. GST is paid by everyone regardless of income level.
GST on Expenses
Invoices for parts and services are treated like the Owner was the final customer, as if you had paid the invoice directly to RVSC (or other managed partner).
This is a separate transaction to the Owners payment, and GST on Owner payment has no bearing on GST on expenses.
For information on payment and invoicing, please click the button below.
Need More Support?
Bronwyn is much more than your average chartered accountant! She founded Cloud Keepers Limited in 2013 as a boutique chartered accountancy firm that operates entirely in the cloud. Three years on, Cloud Keepers is flourishing, with clients all over NZ, and Bronwyn enjoys working remotely. Her work includes a role as finance manager for the Christchurch Adventure Park, which mixes her professional work with her love of mountain biking.
Cloud Keepers offers specialist chartered accountancy services to clients across multiple industries, with a focus on creatives and freelancers. More recently, Bronwyn has been focusing on working with clients in the shared economy, and enjoys applying her accounting powers to assist those new to this growing industry.
Between Bronwyn’s experience and creativity, and all the usual accountant stuff, clients gain a wealth of knowledge about their business and finances, and best practice techniques, as well as crucial support for those who are self-employed. Bronwyn can assist with all aspects of accounting, from GST and tax returns to cash flow, tax forecasting, goal-setting, KPI development, and so much more.
If you need more information or support with your listings and GST, you can think of her a bit like a mentor and cheerleader (minus the pom-poms), supporting you to build and grow your business. Email: email@example.com Contact Mobile: 021517001