Home – New Forums Starting your journey Setup Costs & BAS

  • This topic is empty.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • #986520
    Rivelo
    Member
    • Total posts: 2
    Up
    0
    ::

    Hi All,

    I apologise if this has been answered elsewhere, my search thus far has not revealed it to me!

    I am in the early stages of a startup venture. I decided to register my company for GST from day zero and as such I have incurred expenditure and have not undertaken any revenue generating activities. The ATO has kindly provided me with my first BAS to complete…

    My understanding is that the GST component of expenses incurred prior to producing revenue can be claimed as a setup cost. For now do I complete a “Nil Activity” statement and delay claiming those GST costs until I have produced revenue, or do I claim them on my first Business Activity Statement?

    Further, am I right in placing the GST component of those setup costs as “Capital Purchases” at G10, or would they go elsewhere?

    Thanks in advance for lending me your knowledge.

    Oliver

    #1158245
    S Hjorth
    Member
    • Total posts: 6
    Up
    0
    ::

    Hi Oliver,

    The whole amount is a capital expense – however take note that stuff like stationery, courier bags, etc are general expenses not capital purchases- although you havent started revenue yet. If you buy equipment, machinery, etc these are your capital purchases and need to be depreciated over time rather than being treated an expense. Regardless of what the expense is, you can claim GST on the expense in your first return- as you will be paying GST when you sell a business asset. So it wont be a nil return – usually most business as they set up will be claming GST back as their outgoings are more than incoming. This is just to get you started- hopefully you hear from more business owners or accountants here soon.

    #1158246
    David
    Participant
    • Total posts: 40
    Up
    0
    ::
    Rivelo, post: 182425 wrote:
    Hi All,

    Further, am I right in placing the GST component of those setup costs as “Capital Purchases” at G10, or would they go elsewhere?

    Oliver

    The ATO’s Simpler depreciation for small business outlines simplified treatment for capital items for small business…. it says

    “Simplified depreciation rules are available for small businesses with aggregated turnover of less than $2 million. Under these simpler rules, you can immediately write off most depreciating assets costing less than $6,500 each ($1,000 prior to 1 July 2012).”

    So depending on your set up items you maybe able to treat some of them as non capital purchases.

    More info is available at Chart of Accounts for GST and BAS Reporting

    David

    bizpep.com applications deliver unique business and investment insight providing solutions for 1000's of clients world-wide
    #1158247
    James Millar
    Participant
    • Total posts: 1,739
    Up
    0
    ::
    Rivelo, post: 182425 wrote:
    Hi All,

    I apologise if this has been answered elsewhere, my search thus far has not revealed it to me!

    I am in the early stages of a startup venture. I decided to register my company for GST from day zero and as such I have incurred expenditure and have not undertaken any revenue generating activities. The ATO has kindly provided me with my first BAS to complete…

    My understanding is that the GST component of expenses incurred prior to producing revenue can be claimed as a setup cost. For now do I complete a “Nil Activity” statement and delay claiming those GST costs until I have produced revenue, or do I claim them on my first Business Activity Statement?

    Further, am I right in placing the GST component of those setup costs as “Capital Purchases” at G10, or would they go elsewhere?

    Thanks in advance for lending me your knowledge.

    Oliver

    Some may be on trading (income) account and some may be on capital account (certainly those more “setup” orientated”). Split between the two as best you can but given it has no effect on the overall BAS result there is no need to stress too much about it. Yes claim in first BAS and make sure you have all tax invoices. The ATO regularly review BAS refunds in the first few quarters of registration as part of their anti fraud process. Typically they will ask for the top 10 tax invoices.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1158248
    Rivelo
    Member
    • Total posts: 2
    Up
    0
    ::

    Thanks for the prompt feedback guys, much appreciated.

    Oliver

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