Capital Purchase with GST 10% not deferred (Australia)

1

I have been reviewing the Tax codes and GST tax liability account running balance and BAS Calculation Sheet reports. If I use Tax deferred ( 10%) 0 % the GST calculation sheet shows G10 correctly on Calulation Sheet but the GST is not deferred on normal capital expenditure so the rate of tax should be 10% not zero. The Fixed Assets total in the balance sheet is also over stated by the GST amount and the Tax payable account is understated by the GST paid amount of the capital purchases. I did see where you added the deferred for the instance where it is deferred in that instance , which I must say would only come into play for less than 10% of businesses. in 15 years of doing small business BAS for many different types of businesses I have never seen deferred GST before until I saw that topic in the forum.

If I create a new tax code called CAP being Capital Expenditure with GST , the G10 box is now blank which then makes my BAS reporting wrong

It seem to me the best and easiest way to fix this is to have a built in tax code like deferred but have the code set to 10% not 0% tax rate . Then all problems are solved . I can do journals but very messy and prone to error ,the built in tax code would be best I think from my testing of results .

Thanks again Lubos the software which is really amazing when you get used to all the features and use the search capabilities correctly .

Thanks in Advance

2

For Australia, there are two tax codes

  • GST 10%
  • GST 10% (Deferred)

If GST was deferred, use “deferred” tax code. If it was not deferred, then use normal “GST 10%” tax code.

Manager is actually smart enough to figure out whether purchase is capital purchase (G10) or non-capital purchase (G11) without having multiple tax codes. So just use GST 10% tax code on both capital and non-capital purchases.

3

Hi Lubos

Thank you for quick reply and looking into it for me. I have tested it just with GST 10% and works fine. I am very happy as I was thinking that perhaps Manager was not smart enough to auto fill G10 box on calculation sheet unless I used the deferred code or a new code like CAP . All is working well just using the standard GST 10% code as you advised.

Sorry for any inconvenience ,as there was not an issue with the software , just my understanding of what code to use.

Thanks as always