Payroll payment

Thanks Patch, didn’t expect it to reset the tax codes there, I found both GST 10% & GAS 10%(CAPEX) to both be blank and defaulted to the generic Tax Payable, changed to the ‘20000 Tax Payable’ account code and it corrected it.
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I didn’t follow the second part you mentioned about the difference of Full and Simpler, I think
I may need this topic expanded in a bit more layman’s terms for non-financial managers

  • Create a new test business

  • Import “Business Activity Statement - Simpler”

  • Go to Settings → Tax Codes.

  • The Tax codes processed by “Business Activity Statement - Simpler” are shown.

  • If your business uses any other tax codes the BAS generated by “Business Activity Statement - Simpler” will be wrong for those periods

To find out if your business is using tax codes not supported by “Business Activity Statement - Simpler”

  • Open your business file

  • Go to Settings → Tax codes

  • The number of times each tax code is used is shown to the right of your screen shot (not published above due to cropping)

  • Un-used Tax codes from “Business Activity Statement - Full” but not defined in “Business Activity Statement - Simpler” can just be deleted.

  • Transactions which use Tax codes from “Business Activity Statement - Full” but not defined in “Business Activity Statement - Simpler” will need to be recoded before Manager will allow you to delete these tax codes

This maybe easier to do in the future

So does this mean we need to go through history and change out all the tax codes which don’t match?

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e.g. this PI which was OK before the installing of BAS Simpler is showing the GST on Imports as outstanding.

Should I just change this to GST 10% ?

yes
Provided freight and customs clearing cost had 10% gst added to it.

In contrast if customs charged you $269.69 GST ie 10% GST on a $2696.90 overseas purchase, then you would want to claim the full $269.69 back from the ATO.

I changed it, but it didn’t fix the issue

It’s affecting about 30 PI all with GST on import, and changing it to GST 10% doesn’t seem to fix it

GST on imports is a 100% tax code.
It is used correctly when 100% of the money on that line item is GST
In contrast if 10% of the money on that line item is GST, then a GST 10% tax code is used.

You have to look at the invoice carefully to see what actually happened

So am I right in saying historically speaking, the Tax code for GST on Imports was wrong, should have been 100%?

Even if so, I don’t know how to make it work with the new installed BAS Simpler
(is the BAS full meant to be uninstalled? if so how)
Feeling I need a quick 1on1 zoom to sort this out … if possible

P.S. I’m firing my accountant tomorrow …

Edit: you are correct here, this is fully GST only $269.69 for a $2696.90 overseas purchase
In contrast if customs charged you $269.69 GST ie 10% GST on a $2696.90 overseas purchase, then you would want to claim the full $269.69 back from the ATO.

I’ve changed the GST on Imports to pass-through 100% and this got rid of all the errors so far that I can see
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If you are importing goods and customers is charging you GST directly, then you will need to create an edited version of “Business Activity Statement — Simpler” that includes in “1B GST on purchases” both

  • “Tax on purchases - GST 10%” and
  • “Tax on purchases - GST on imports”

Otherwise when you put in your GST you wont claim back all the GST you have paid and you GST liabilities account will not zero when you put in your BAS

Alternatively you could continue to use the “Business Activity Statement — Full” but just enter G1, 1A and 1B from it.
I think you would only need to use the tax codes

  • GST 10%
  • GST free
  • GST on imports

As you probably don’t report G2, G3, G4 G10, G11, 7A, 8A

Edit
Actually the NG Software versions of “Business Activity Statement — Simpler” should probably include “GST on imports” as small business will use and report this

That would be helpful, as I nearly feinted when I saw your comment to customise, I’ve had 2x 14 hour days cleaning up my accountants errors and the BAS Simpler issues.
Literally opened and checked/adjusted every PI and SI.
Managed to get rid of some leaving these three codes

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P.S. GST on Imports is used on both PI & SI

@lubos
Agreed, I have gone through and this is an issue as I do use “GST on imports” quite a bit.
This would under report my allowable deductions.

I have made this mock up to see what happens and compare BAS Full & Simplier:




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Edit: let me know it these are set correctly
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and this is a real example of what we typically receive from our forwarder:

To correct this create an updated versions of BAS - Simpler. Update 1A and 1B to include “GST on imports”. Which added the applicable part of BAS - Full to BAS simpler

Thanks Patch, but please a few more baby steps, step me through this task, where to go to create this, is it custom forms? … step 1, 2, 3, (grumpy old man on day 3 of 14 hour days with a splitting headache, almost reaching the goal post)

Settings → Report transformation → New report transformation

In another window as a reference
Settings → Report transformation → Business Activity Statement - Simpler or Full → Edit

See also Report Transformations - No-code development platform

Thanks @Patch

Original

Modified :slight_smile: but not too sure if meant to have the “Total Sales - GST on Imports or not ???”

Edit: Still didn’t deduct the $1k GST on Imports
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Adding the Tax Liability - GST on Imports to Amount owing to ATO, seems to have fixed the issue.
Let me know if you see any errors, thanks


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@lubos As I now finally grasp how the ‘out of the box’ BAS simpler excluded ‘GST on Imports’ (thanks to @Patch kind patience and guidance), and the needed for users to be aware and to make a modified version (done in Report Transformations), and not having done this, would have under reported GST deductions, I’m wondering how many other businesses are unaware of this and losing money?

Basically, I made a mistake by introducing BAS - Full and BAS - Simpler.

There should have been just one BAS.

The point of BAS - Simpler is that it is using only 2 tax codes which is what vast majority of small businesses in Australia actually need. However, if you import both Full and Simpler then you get all the tax codes. But the Simpler variation of BAS will never see those more advanced tax codes.

So if you use more advanced tax codes such as GST on Imports, then you need to view BAS - Full but that’s when users might fall into the trap by viewing BAS - Simpler instead.

The solution is to have just one BAS. And perhaps make those less common tax codes Inactive by default.

I believe the introduction of BAS Simpler was from 1 July 2017 but only for businesses with < $10M/annum turnover, so it may be that BAS Full is still needed for legacy reporting of small businesses if audited and ongoing for large businesses.

So maybe it’s not a mistake at all, keeping both is necessary, but needs some tweaking is all.

Maybe making BAS Full available for BAS prior to 1 July 2017 for all businesses, and after 1 July 2017 only for >$10m/annum businesses, and this could be set to default BAS Full to ‘inactive’ after 1 July 2017 for <$10M/annum businesses.

You must also consider smaller businesses which (hopefully) grow and transition from <$10M/annum turnover to >$10M/annum turnover, and want to continue using Manager, these will need to be able to activate the BAS Full and have available the necessary tax codes (and also if a business declines and transitions from Full to Simpler).

Then also make the redundant tax codes (like “GST 10% (CAPEX)” ) unavailable to select for these smaller businesses post 1 July 2017, to ensure only relevant tax codes are available for those smaller businesses to use.