Home – New Forums Money matters GST FREE vs NO TAX

  • This topic is empty.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • #995218
    d3mad
    Member
    • Total posts: 73
    Up
    0
    ::

    I’m still setting up my chart of accounts and in doing my first tax audit report I’ve realised that in some areas I haven’t entered a tax code (No Tax or NT) and so no tax is applied and in others I’ve entered GST Free.

    Where GST *is* applied there is no problem, but in the tax audit I’m coming up with three columns: GST 10%, GST Free, NT.

    Before going and making everything either NT or GST Free, is there a subtle difference I should be accounting for or are they equal? And, is there a preference to what I should be using? (at the moment and as far as I’m aware, I’m not using or required to use any other tax—for now)

    For example, when dealing with someone with an ABN that’s not registered for GST, I would enter the invoice as GST Free or No Tax, or it really doesn’t matter?

    #1200644
    Corey
    Member
    • Total posts: 568
    Up
    0
    ::

    Hiya Dave,

    the Australian Tax Office GST is a good place to start

    Cheers
    Corey

    #1200645
    Taylored
    Member
    • Total posts: 44
    Up
    0
    ::

    Hi, the subtle difference is that if you tag something as NT it will not be linked to your purchases amount in your GST report from your software so although it appears to be no different, it actually is. You report purchases on your BAS. NT I think is actually misnamed and should be called Not Reportable as they are transactions outside the GST system whereas GST Free are transactions inside the system but have been made exclusive of the 10% by legislation, ie its free because they say its free otherwise it would have attracted GST. If the supplier is not registered then the code (depending on the system) should be SNR which again is no 10% but is different again not because its said by legislation to be different but is because they are not registered for GST. So while the answer is the same to a point the subtle differences do matter

    Cheers

    Taylored

    #1200646
    d3mad
    Member
    • Total posts: 73
    Up
    0
    ::

    [USER=31331]@Corey[/USER] thanks, I spent a bit of time on there, but came away knowing less than I thought I already knew ;)

    [USER=62828]@Taylored[/USER] that explains a few things that I noticed when generating reports. I figured there’d be more to it. I noticed that the majority of entries in the NT column were more capital investments and the like, but others as well (which appeared were incorrectly placed).

    Regarding SNR (I’m guessing “Supplier Not Registered”?), should I be using a different code again, or would I use GST FREE? I assumed GST FREE since I have paid them no GST nor have they collected any from me. I just looked into t, it has no option for SNR. The only Australian codes being:

    [ATTACH=full]1249[/ATTACH]

    I’ll ask in their forums, but any info is appreciated since this is all very new to me.

    *edit: can disregard, I just found an old post in their forums which indicate to use GST Free as it carries over to the same field in the BAS statement*

    #1200647
    Easysmb
    Member
    • Total posts: 84
    Up
    0
    ::

    Hi Dave
    It is better for you to setup the chart of accounts right before you use the book, or you will have to go back to amend all the details. It will be better to ask your accountant to help you at first. If you prefer to do accounts by yourself that is fine, just work with your accountant for a few cycles first, it will save lots of time.

    Regarding your questions:
    Supplier that not registering GST, you can use GST free or setup new tax code either “SNR” or “GNR” (GST Not Registered), but not NT; NT will not be included in BAS reporting.

Viewing 5 posts - 1 through 5 (of 5 total)
  • You must be logged in to reply to this topic.