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April 13, 2010 at 12:00 pm #967813Up::0
I’m still in the process of registering for an ABN & GST…
I bought a car yesterday (cash) which I’m also going to use for business purposes…
Once I register for GST, can I simply list the purchase of the car on my first BAS return and I’ll get the entire GST amount back? Or does it work differently when buying a car and claiming back GST?
April 13, 2010 at 11:33 pm #1028944Up::0Need to know
1. Are you a company or a sole trader? There are different rules for pre commencment acquisitions for companies.
2. Is the vehicle to be owned by the business or by you personally? If you are a sole prop the distinction is simply whether or not its a “business asset” or a personal asset. Any personal use will effect the extent to which you are able to claim a GST credit.
3. Did the seller of the car provide you with a tax invoice and did it indicate that GST was included in it? You must have a tax invoice to claim an input tax (GST) credit.
3. What was the effective start date of your business that you listed on the business reg form submitted? If it was prior to the the acquisition then you can claim (provided you are registered for GST and satisfy 1 above).
Keep in mind that any future disposal of business assets will result in a GST liability – so if you sell the car after it becomes a business asset allow for 1/11th to go to the ATO.
Helping build better businesses and better lives with expert financial and taxation advice. info@360partners.com.au www.360partners.com.au 03 9005 4900April 13, 2010 at 11:41 pm #1028945Up::0JamesMillar, post: 34590 wrote:Need to know1. Are you a company or a sole trader? There are different rules for pre commencment acquisitions for companies.
2. Is the vehicle to be owned by the business or by you personally? If you are a sole prop the distinction is simply whether or not its a “business asset” or a personal asset. Any personal use will effect the extent to which you are able to claim a GST credit.
3. Did the seller of the car provide you with a tax invoice and did it indicate that GST was included in it? You must have a tax invoice to claim an input tax (GST) credit.
3. What was the effective start date of your business that you listed on the business reg form submitted? If it was prior to the the acquisition then you can claim (provided you are registered for GST and satisfy 1 above).
Keep in mind that any future disposal of business assets will result in a GST liability – so if you sell the car after it becomes a business asset allow for 1/11th to go to the ATO.
Thanks for the reply.
1. I’m a sole trader. Business name registered about 2 months ago.
2. The car was bought 2 days ago and is Registered in my name. I’m starting an online electronic shop business, so I’m going to use the car to drive around to pickup stock etc… But also for personal use, over weekends etc..
3. Not sure which business reg form you referring to? I’m still in the process of registering for my ABN & GST. But my business name was registered about 2 months ago. Do I need to notify ATO of my effective start date? I have not yet started transacting because I need my ABN to register for business bank account.
I am aware that if I sell the car that I need to pay GST back to ATO, no problem there…
Thanks for your help!
April 14, 2010 at 12:01 am #1028946Up::0OK thats a little clearer.
You mention that you are “in the process” of registering the ABN / GST – where exactly are you at with it? Have you submitted the form and are awaiting the number from the ATO our are you still just preparing the form? If it hasn’t been submitted then yes you will need to include your effective start date and you should make that prior to the large acquistions.
Business name registration is a separate matter to these things and it sounds like that is all under control.
You could make the choice as to whether you want this to be a business asset or a personal asset (and even if its a business asset you will need to adjust for the part that is private use). Its important to distinguish business from personal assets for a number of reasons. If its a business asset also let your insurance company know about this.
Apart from all of the above – you will still need to have a valid tax invoice to claim the credit. You didn’t indicate whether you have one.
Helping build better businesses and better lives with expert financial and taxation advice. info@360partners.com.au www.360partners.com.au 03 9005 4900April 14, 2010 at 2:06 am #1028947Up::0Hi,
I forgot to answer that question. Yes, I do have a Tax Invoice for the car, made out to me. I only received my TFN yesterday, so can only register for my ABN today, going to do that now.
When completing the online ABN registration, should I indicate that my start date was prior to when I bought the car?
April 14, 2010 at 2:12 am #1028948Up::0FaNIX, post: 34634 wrote:Hi,
When completing the online ABN registration, should I indicate that my start date was prior to when I bought the car? YesHelping build better businesses and better lives with expert financial and taxation advice. info@360partners.com.au www.360partners.com.au 03 9005 4900 -
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