How to add GST Codes to your transactions
The following should be read in conjunction with Budgets Get Real’s in program Help.
Changes to Transaction register
The basic layout or functionality of the Register is does not change when Business Codes are enabled.
You can either display the Job Code or Business Code – switching between either view using the extra links shown on the status bar. These links will only be visible when Business codes are activated.
TIP: In BizCode mode clicking on the Biz code column opens the “Multiple Categories” window in all cases to permit immediate changes of both Business and Job Codes. Clicking on the Account name column will usually open the “Apply a Combination” window (unless the transaction is split – Account name will also show a red dot to indicate this).
Changes to Categorisation window
Business codes are entered at the “Multiple Categories” window. An additional column titled BizCode appears.
Reminders and Memos
Activating Business Code adds additional Reference fields to the Reminder window as follows. All details on this screen can be exported for inclusion with BAS report
Some tips to simplify BAS reporting
In preparing your BAS reports you tell the program what codes are to be used with each required category in the BAS form. For example, Category “G1 Total Sales” is calculated by listing all sales transactions with your nominated taxCodes for the nominated date range.
Conceptually it’s simple. The issue is making sure that you have correctly allocated codes to all relevant transactions and not missed any codes etc. While the exception reports will pickup obvious anomalies the following rules will simplify BAS preparation. Some of these tips have been discussed in the setup instruction but are listed again for completeness.
- Ensure you have adequate categories specified
- Set a default code to each category.
- When categorising imports don’t bypass and leave transactions you are unsure about. Mark these to a “Suspense” category or to a GST “Query” code. That way you can search for these transactions in preparing your reports. You may also wish to set a Reminder for yourself.
- Try and keep Business accounts separate from Private accounts.
- If you have Private transactions within these Business accounts you MUST nominate these with an appropriate zero-rate tax code (e.g. PRI).
- You can still have Business related transactions in your Private accounts. These all must have a tax code (even if it is zero-rate).
- Use the Reminders feature to record Invoice numbers etc.
- Where a receipt or purchase consists of several tax components, each with different tax rates, you should split the component into the amounts relevant to each tax type.
Handling special GST issues with Budgets GetReal
Supplier does not quote an ABN/TFN
This is a special GST situation that must be specially handled separately from normal GST. Budgets GetReal provides a special method for simply handling this case.
The requirements, as outlined on the ATO website, are.
Any business or other organisation carrying on an enterprise should quote their ABN in relation to goods or services they supply to another enterprise.
If they do not quote their ABN, the general rule is that the payer must withhold 46.5% from their payment and send the withheld amount to the Tax Office. Some payments are excluded from this rule.
How this is best handled is illustrated by the following example. In this case the payer is presented an invoice $1000 without an ABN/TFN being quoted.
Note: This is not taxation advice and you should verify this procedure with the ATO or your accountant. The exact procedure will depend on your circumstances.
Actions by the Payer (assumed using BGR).
1. Pay the supplier $535-00. This is what eventually shows on the payers bank statement and in BGR following import.
2. Categorise the payment to the supplier and relevant category. Apply a tax code of ABN to the transaction. Add Reminder that need to provide Group Certificate to supplier.
3. On the next BAS report, since ABN code has a rate of -46.5%, the following will be suggest remitting $465 to the ATO:
PreTax amount: $535 / (1 – .465) >> $1000
Tax due: $535 * .465 / (1 – .465) >> $465
4. At tax year end provide a Group certificate to the Supplier.
Group certificate for $1000-00
Withheld $465-00 in tax. Supplier then claims in his return.
Actions by Payee (also assumed using BGR).
- Will first see, on statement, as $535 received.
- When categorise the transaction must not add as ABN code. In stead categorise with a no-rate code like N-T. There is no claim back mechanism under GST.
- Enter as Reminder with details to ensure one get Group Certificate from Payer. Lodge Group certificate with tax return.
Voluntary Withholding
This is similar in processing to the no ABN case. In this case the supplier quotes a valid ABN/TFN but requests the payer to withhold tax. This is a rare occurrence.
The only difference is that the rate is variable. The accounts make allowance for code VWH20 at 20%. Because rates are determined at report time a separate code is needed for each separate rate.
Adjustments
If you have adjustments such as sales returns and discounts, purchase returns or similar adjustments, simply apply the same code as used with the original transaction.
Consider the case where an item was sold for $99-00 and later returned for refund. The transactions are as follows:
- Statement shows receipt of $99-00. Assign tax code GST. Means that the $99-00 will show under category G1 in the BAS report with $9-00 tax showing under category G9(1A).
- The customer requests a refund. This shows on your statement as a payment of $99-00. Again you assign tax code GST to this. Means that the $99-00 will show under category G11 in the BAS report with $9-00 tax showing under category G20(1B).
The above will correctly calculate your tax obligations. The important point to note is that codes where adjustments can occur (e.g. GST) must be mapped in both sales and purchases groupings (in this case G1 and G11).
To assist tracking you may choose to enter a Reminder and use the reference fields to tie the two transactions together. Include these in your export report.
What if GST rates change ?
Transactions store detail of the allocated code and not the associated rate. The rate used in calculating BAS reports is that set when reports are exported.
Consider the case where a taxation code requires a rate change. While you may simply change the code rate, this may invalidate previous transaction reports.
Say the GST rate went from 10% to 15%. To update the GST on all transactions after the changeover date you would:
- Ensure all transactions are entered to the changeover date and categorised. Do NOT import transactions after the changeover date until steps 2 & 3 are complete.
- Rename “GST” to “GST_z” (or similar) leaving the rate alone. All existing transactions will show “GST_z” and be calculated at 10%.
- Create a new “GST” code at 15%. Use this for all transactions after the changeover date.
