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Common GST Mistakes
Fiona McKinlay • December 27, 2018
The fact is the Australia Goods and service tax, while it’s not going to just go away, has been around for a long time and people are still getting it wrong when they are doing their books.
Sunshine Coast Bookkeeper with GST Procedures
You can almost hear actor Michael Caton most famous role Darryl Kerrigan in “The Castle” curse former Prime Minister John Howard whenever the discussion of the GST comes up.
The fact is the Australia Goods and service tax, while it’s not going to just go away, has been around for a long time and people are still getting it wrong when they are doing their books.
This is bad business practice because on one end, you might be paying out too much and shortchanging your business, and on the other side you might not be paying enough and could cop a hefty tax bill.
Unless you a dedicated to finances, it is easy to make a mistake when it comes to GST.
Here are some of the most common mistakes made when it comes to one of Prime Minister Howard’s legacy items.
Set up wrong!
You might have noticed when creating your Chart of Accounts in your bookkeeping software that there are plenty of options around which GST to factor in. Is it “GST on Capital”, “GST on Non-Capital”, “GST Free”, “Out of Scope”, or one of the many other options. The tax code that you set up for your accounts has to be correct from the start or you are going to be spending a lot of time and money fixing it up.
Reporting failure
So, you received a business grant or a government subsidy, while this is great news for your business, it can cause havoc on your accounts if you are like most people and forget that most government schemes are inclusive of GST. Always double check the funding agreement to the final details before making your report on income.
Is it an asset?
Basic check of your GST knowledge; which code does a capital asset of over $1000 go under? If you said G11 then you are going to have a long night at the office as you are going to have to go back through all capital purchases and mark them as G10. One little number but it makes the world of difference to the tax office.
GST doesn’t have to be a nightmare, but it’s best to have an expert set your GST accounts up before the worst can happen. If you are looking for a hand in setting up, or just want some top notch expert GST advice, then
contact Balanced Bookeepers and BAS agents today!
And then there are employee payment summaries and the summary of income and expenses in a profit and loss statement, the record of debtors and creditors, asset purchases and expenditure on improvements, depreciation expense claims and capital gains tax, income tax returns and yearly reports, returns for PAYG withholding, fringe benefits tax (FBT), Goods and Services Tax (GST), and the taxable payments reporting system, meeting superannuation requirements… the list goes on and on.
With so many great software options including XERO, MYOB and Reckon. It’s vital for Balanced Bookkeeping and Business Solutions to be on top of them all. Our expert team can help tailor fit any software your business needs. We proudly keep the Sunshine Coast on top of their accounts. Ask us how we can help you today.
Balanced Bookkeeping and Business Solutions is a local Sunshine Coast company that provides a complete bookkeeping service and solutions for small to medium businesses and can cope easily with both the ATO and ACNC, so that you can pursue the far more rewarding and philanthropic business of fund-raising and distributing to the deserving foundation or trust of your choice.
Balanced Bookkeeping and Business Solutions is a local, Sunshine Coast business that provides a complete bookkeeping service and solutions for small to medium businesses. The principal of Balanced Bookkeeping and Business Solutions has worked in the accounting industry for over 20 years and is a qualified accountant and registered BAS agent, which means that you can discuss the pros and cons of casual and full time and part time employment, knowing that you will receive practical, constructive, valuable advice.
So, what is Fringe Benefits Tax? Simply put, it’s an extra tax that you cover for your employee that is for the benefit of the employee in lieu of paying them more money. The tax is calculated on the value of what is being used for FBT.
This is only a new initiative as we mention that came into effect as of the 1st of July 2018, so there are still a lot of questions to be answered. This is why a number of clients we serve on the Sunshine Coast have been coming to us at Balanced Bookkeeping and Business Solutions to see their options.
