Home – New Forums Money matters How to treat landlord contributions?

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  • #995707
    d3mad
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    So my wife has opened the doors to her wonderful thai take-away shop and we’re underway and doing quite ok. A lot better than I expected and forgetting set-up costs we’re breaking even. YAY!

    The landlord chipped in with a “fit-out contribution” upon meeting certain criteria which we met. What this meant was:

    • We paid the services provided by different parties
    • We received a tax invoice or invoice for those services
    • We provided a tax invoice to the landlord with all copies of the invoices and tax invoices, so the total of our tax invoice included a GST component being GST that we have already paid
    • They remitted a sum to us equal to the total value of our tax invoice (which includes that GST)

    How do I record it as far as accounting goes? It seems this GST is just going backwards and forwards and I’m not sure how it should be logged.

    Initially I put personal funds in, this is a personal contribution, no GST associated

    I pay X tax invoices which include Y GST (there was one invoice without GST in there from a non GST registered entity). I have paid that Y GST

    They are returning to me a contribution to the fitout.

    Is this an “Income”?

    Can I simply draw this amount back out (if I wanted to) without GST implications?

    In essence have they just paid the GST that I paid, therefore I lose the benefits of those credits?

    Any advice on how to enter this into my accounting package and how to specifically treat the GST would be appreciated.

    #1203536
    d3mad
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    I think my concern is the overall appearance of a level of income that could have tax implications (if there are any) at the end of the year when in essence we’re acting as a middle man for the goods and services that we bought and paid for, for which we’ve been reimbursed.

    Do they simply cancel each other out?

    and then back to my final point, how do I enter it all?

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