In issue 3 of HavaMag Magazine I posted 5 questions and below are the answers to these.

If you did not know the answers or are just checking and perhaps you find that when you see the answers that you go "ooh I didn't know that!".  Then perhaps it is time that you either:

• engage a professional such as a Registered BAS Agent or a Registered Tax Agent to do your bookwork for you.  Registered BAS Agents can be very cost effective and an asset to your business.
• get educated!  If you are a contract or employed bookkeeper, financial controller or finance officer and you didn't know the answers to these then you need to either attain your academic qualifications or do some further education to find out what is correct and what isnt.
• don't muck around with your Business Activity Statements, they are a legal document and some errors can be very costly and there are penalities for incorrect information and fraudlent activities.

Question 1:
Do you know if Motor Vehicle Green slips or CTP slips net value is all subject to GST and reported on the BAS?

Answer: Simple answer is NO.  There is always a portion of your Green slips that is subject to Stamp Duty and Stamp Duty is not reportable on the BAS.  Stamp Duty needs to be coded to INP which isn't reported on the BAS statement.  For a more detailed answer please read on (please note that this example is a very good one for those that may need to account for an insurance claim).

Question 2:
Do you know where on the Business Activity Statement wages are reported?

Answer: At W1 - and for further explanation read on....

Question 3:
Do you know where to code Stamp Duty in your accounts/bookwork and is it included in the BAS?

Answer: Stamp Duty, whilst is not reportable on your BAS it can be tax deductible and therefore is an expense (normally around the financial charges in your chart) and what do you tax code this?  As explained in question 1, Stamp Duty is not reportable on your BAS therefore a code of INP will indicate this for you.

Question 4:
Do you know if a purchase of an asset (something you are going to keep for 3 years +) is coded to expenses?

Answer:  The purchase of an asset is a capital expenditure therefore it is coded to the Balance Sheet under Fixed Assets.  This type of purchase attracts a GST coding of CAG, CAP, etc

Question 5:
Do you know how much GST to claim if you purchased a motor vehicle over $76,000?

If you use a motor vehicle solely in carrying on your business and you're registered for GST, you're generally entitled to claim a GST credit for the GST included in the price of the vehicle, provided you have a tax invoice. You must include the amount you paid for the motor vehicle at G10 (capital purchases) on your activity statement.

Special rules apply for cars with a value exceeding the car limit.

The car limit for the 2009-10 financial year is $57,180, and the car limit has increased to $57,466 for the 2010-11 financial year. This limit is reviewed each financial year and may change.

The fuel efficient car limit is $75,000 for the 2009-10 financial year. A fuel efficient car is a car that has a fuel consumption not exceeding 7 litres per 100 kilometres. Luxury car tax does not apply to fuel efficient cars under the fuel efficient car limit.

Generally, if you purchase a car and the price is more than the car limit, the maximum amount of GST credit you can claim is one-eleventh of that limit. For 2009-10, the maximum GST credit you can claim is $5,198 (that is, 1/11 x $57,180). This limit also applies to cars which are fuel efficient.

If you purchase a car with a price that is more than the car limit, you include only the amount of the car limit (or the proportion of the car limit relating to business use) at G10.

If you use the accounts method to work out your GST amounts, include one-eleventh of the car limit (or the proportion that relates to your business use) at 1B (GST on purchases). If you use the calculation sheet method to work out your GST amounts, use the calculation sheet to work out how much to include at 1B.

Example
Darren purchases a new car for $68,043 (including $6,000 GST and $3,258 luxury car tax) on 12 July 2009. Darren plans to use the car 100% in carrying on his business. As the car limit for the 2009-10 financial year is $57,180, the maximum GST credit Darren can claim is $5,198 (1/11 x $57,180).

Darren reports $57,180 at G10 on his activity statement and includes a GST credit of $5,198 at 1B.

If Darren planned to use the car only 50% in carrying on his business, he would report $28,590 at G10 and include a GST credit of $2,599 (50% of $5,198) at 1B.