GST

Common GST Mistakes

GST Mistakes

When you’re completing your activity statements, it’s easy to make mistakes. It happens a lot and we see them first hand here at e-BAS Accounts. The main mistakes users make are in relation to tax codes. Users often use the wrong tax code when entering various transactions into their software. Here are some common transactions that are often coded incorrectly. We show the correct tax code application:

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Meal entertainment: when does GST apply?

The area of “meal entertainment” is an absolute minefield for accounting professionals like us. It can be very difficult to know when an expense incurred by a client relating to food or drink should be recorded with GST or not. Luckily there is a resource out there via the ATO that brings some clarity to the situation.

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Netflix Tax – A Bookkeeper’s View (from the Trenches)

My last blog was all about the new “Netflix Tax” and was really just an informational blog outlining what, how and when etc. In this blog, I want to look at the tax from a bookkeeper’s perspective and provide a real “from the trenches” viewpoint. All is not what it seems with the Netflix Tax!

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Registered for GST? What you need to know about the Netflix Tax.

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For some time now, larger IT companies have been charging GST to their Australian consumers. Examples of these are Google, Adobe and Linkedin. They are doing this because of a new law which began formally on 1 July 2017. This new law known colloquially as the “Netflix Tax”, requires all international companies with an annual GST turnover of $75K or more and selling services and digital products to Australian consumers, to enter the Australian GST system. While most of us aren’t too impressed with the 10% price hike on these products, GST registered business owners understand that they can claim the GST back in their BAS which alleviates the sting a little……or so they thought! Sadly, this is not the case with this new law . The “Netflix Tax” tells us something different and if you’re not paying attention, you or your BAS Agent are likely to get things wrong when processing your next BAS. Read on.

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Simpler BAS – simpler in name only?

The ATO has recognised that there are too many labels to complete on the BAS – you can see just how many if you check out my blog series on BAS Labels – way too many! So, to make things easier for small business, a new “simpler BAS” will be introduced from 1 July 2017. It has been designed to help businesses reduce the time spent on BAS compliance and its associated costs. So how exactly does the “Simpler BAS” work and will it actually simplify our business lives? I’m not so sure…….

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How we work with you to get your BAS done

When I’m checking out companies on social media I often see that they’re doing exactly what I’m doing – sharing content related to their industries rather than sharing information directly about their companies. They do this so as not to come off as doing the “hard sell” to potential customers but rather go the “soft sell” approach by offering free content in the hopes that customers will visit their website through sheer intrigue. Don’t get me wrong, this approach does work – I should know, I use it! Lately, however, when pursuing companies on social media, I’ve started to really wish that they would just tell me what their product does and how to use it. Yes, I appreciate the extra free content they provide, but in general, if I’m half interested in their product, all I really want to see is information about that product. So that said, I’ve decided to apply this rationale to my own blogging strategy for a bit because I wouldn’t mind betting there are potential customers out there saying the same thing about this e-BAS Accounts! For the next few weeks, this blog will be all about e-BAS Accounts – how we work and the products and services we provide. That’s right – it’s going to be all about us – the how, why and what! To kick off this new blogging strategy, today’s blog is going to be all about our Business Activity Statement (BAS) procedure. I’ll explain what we do and what clients need to do (and stop doing) to make this “system” work.

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What’s in a GST name?

The Goods and Services Tax which we now call “GST” for short, is a complicated and convoluted tax, I’m sure you’ll all agree. The system is fraught with rules with which even the most experienced BAS or Tax Agents struggle to understand. At its core, one of the most difficult aspects of the GST is its own language (yes it has its own language!). The terms used by the ATO to describe even the simplest concept can be confusing and this is why we have supplied a graphic below which explains what some of these terms mean. We hope you find it helpful.

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How to account for prepayments and GST

Towards the end of each financial year, many business owners review their expenses and pinpoint which ones can be prepaid before June 30 in order to obtain a substantial tax deduction. Typically, expenses such as office rent and insurance are paid 12 months in advance and are then classified as prepayments. This is particularly useful if the profit margin is high and the business owner wishes to reduce tax payable (and who doesn’t!). But how do you enter these transactions into your accounts and how is GST affected? Let’s review this now.

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