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Most businesses are familiar with how GST works. But here’s a few reminders to make sure you’re
being compliant and maximising your GST claims.
GST is paid at each step in the supply chain and business charge GST in the price of goods, services
or anything else they supply. If an entity is registered for GST, it can claim input tax credits from
the ATO for any GST included in the price paid for goods, services or anything else bought for the
However, for GST registered enterprises, the liability to pay GST rests on the supplier of
goods and services, not on the consumer. In other words, even if the business does not include the
GST in the price of goods and services supplied, it is still liable to pay it to the ATO.
Coffee or cars anyone?
As we move into a new financial year, you may be thinking of rewarding the office with an
impressive new coffee machine for the staff room, or perhaps you are thinking a bit bigger, say a
new vehicle. Either way you may want to keep some of these GST issues in mind:
– Bank fees – ordinary monthly bank account charges won’t include GST, but merchant fees
do so check your accounting system is set up to capture the GST on those merchant fees.
– Insurance policies – insurance policies often include a small stamp duty component which
does not attract GST. If your accounting software is set up to claim a full 10% GST (or 1/11th
of the premium cost) you may be overclaiming GST.
– Recharge or top-up cards – e.g. for tolls, telephone (and vouchers given as Christmas or other
gifts) – GST should only be accounted for when the recharge is used or redeemed for
purchases used in your business, not when the cards or vouchers are purchased.
– Private apportionment – eligible small businesses can make an annual apportionment of GST
where purchases are partly for business and partly for private purposes rather than each
time you pay an expense. You can make this adjustment in the activity statement that covers
the period your income tax return is due, making sure not to reduce your GST claim twice
(once when you paid the expense, and once as part of the annual adjustment).
– Software subscriptions – you may not be claiming GST on software subscriptions on the
basis that the supplier is an overseas supplier. However, from 1 July 2017 the rules changed
in this area so you may be paying GST when you do not have to, or not claiming GST when
you could be – you will need to check your tax invoices and let your bookkeeper or
accountant know if the software subscriptions you are paying include GST (or provide the
software supplier your ABN so you are not charged in the first instance).
Remember the best way to maximise your GST claims is by checking your tax invoices for GST paid
(you have four years to claim the GST), and then keeping those and other GST records for 5 years.
If you have any questions around GST, reach out to us.
DISCLAIMER: This information is general in nature. It has been prepared without taking into account your objectives, personal or business circumstances, financial situation or needs. Because of this, you should, before acting on this information, consider in consultation with your adviser, its appropriateness, having regard to your objectives, personal or business circumstances, financial situation and needs.