Top 10 GST Mistakes
The approach to the year 2000 brought us many things to worry about…and no I don’t just mean the Y2K conspiracy. I am talking about the introduction of the Goods and Services Tax in Australia, or GST as it’s more commonly referred to on July 1st, 2000. Since then, more than 22 years have passed, made up of 89 BAS Quarters or a whopping 267 Monthly IAS’s and yet we still see the occurrence of many GST errors. As a refresher we have listed below are our top 10 GST mistakes we are still seeing more than two decades on.
- 1/11th of GST claimed on Motor Vehicle Registrations. In Queensland, our registration is made up of both a registration fee as well as a CTP component (Compulsory Third Party Insurance). No GST is paid on the registration fee portion. In addition, upon registering your vehicle you also nominate whether you are claiming the input tax credit. Only GST registered businesses are entitled to do so. This will show on your renewal. You can change your input tax credit entitlement with the Department of Transport and Main Roads.
- Insurances just like registrations we often see 1/11th of GST claimed being claimed time and time again. Insurances including Business, Workcover, Indemnity and Motor Vehicle Insurance often include a stamp duty portion which is not subject to GST. The GST is included on any broker fees and clearly identified on your insurance notice.
- Phone bills are in most cases entirely subject to GST. Items including international calls are GST Free so best to check against your actual bill to ensure accuracy. In addition, late fees are typically GST Free as well.
- Postage overseas is GST free however any packaging may include GST. If on account with Australia Post the monthly statement will clearly show the GST for the period covered.
- GST credits on security deposits can only be claimed when either the deposit is forfeited, or it is applied towards the total cost of a purchase. Otherwise, the deposit is not subject to GST.
- The supply of Vouchers & Gift Cards does not attract GST. GST only applies once the voucher is redeemed. This is to prevent double taxation of supplies. This also applies to the purchase of vouchers (such as Staff Christmas Gifts) which again are GST Free. With the GST incurred by the redeemer of the gift card.
- There are two main types of bank fees. General bank charges like monthly or annual fees are input-taxed and therefore not subject to GST. The other type are merchant fees which do usually attract GST such as Tyro, Stripe and eWay. PayPal merchant fees are an exception and remain GST free.
- Many clients are purchasing business items through To claim a GST credit, you need to have an invoice showing that you were charged GST. If they do not provide you with a tax invoice, there is no evidence that you paid GST, so you are not entitled to a credit. If you need a tax invoice showing the GST component for an item you bought, you need to contact the EBAY seller and get them to provide you with one before claiming any credits.
- ASIC Fees are not subject to GST either for company fees or business name fees.
- Clients often claim 1/11th of payments to Supermarkets for Staff amenities. Many staff items like Milk, Sugar, Tea & Coffee are GST Free. Therefore, the correct GST needs to be taken off the receipt provided. Of course, GST is claimable on cake and biscuits. Now that is a good incentive for a sweet morning tea if you ever needed one!
If you have questions in relation to the above, or any other matters, please do not hesitate to contact our office on 1300 620 345.