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Join Date: Jul 2010
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| | Re: MYOB Tax Codes
The differentiation between the use of tax codes is decided not by the dollar amount, but by the nature of the expense. If the expense is capital in nature, i.e. it is equipment that you use or something that has a usable life that spans more than one year, then that expense should have the CAP code. The GST/FRE codes are used for most other business expenses.
The dollar amounts that you have referred to relate to the treatment of these expenses in your tax return, which is sometimes different to the way you need to report them on your BAS. You may wish to post these expenses to different accounts so that they are easy to identify. For instance I would suggest posting all capital purchases over $1000 to the asset account named Plant & Equipment. Capital purchases less than $1000 could go to an expense (or other expense) account called Equipment < $1000.
When you purchase something from a supplier who is not registered for GST as you have described, then you should use the GNR tax code. MYOB has set up this tax code specifically for this purpose. In effect using the FRE tax code has the same effect, but GNR is technically correct.
Hope this helps.