KISS the ATO?
For many years the Australian Taxation Office has been viewed with trepidation as our tax laws are some of the most complicated and convoluted around, so it is welcome news to hear that they are looking at the KISS principle (Keep It Simple) to make every small business-owners life easier.
The first way they are looking to do this is by implementing ‘Simpler BAS’ for businesses with a turnover of less than $10 million. From 1 July 2017, the GST coding options will now be:
The only thing that will need to be considered is whether GST has to be charged on the sale. If it is, then the data is captured with the ‘GST’ code. If GST is not required to be charged on the sale, then it will be captured under the ‘No GST’ code. It is that simple!
It is the same for purchases. Ask yourself, ‘am I able to claim back the GST on this item?’ If the answer is yes, use the ‘GST’ code. If you aren’t able to claim the GST, then use the ‘No GST’ code.
This will then lead to the completion of the GST reporting obligations for your BAS in three lines, GST on sales (1A), GST on purchases (1B) and Total Sales (G1). So nice and simple! I am sure the 2.7 million small business-owners out there will agree!
There will no longer be a need to categorise GST free sales, Capital purchases or Non-Capital purchases and/or Export Sales and the seemingly endless variations required in each accounting software package. The good news is that the software providers are on-board and working on design system solutions to make the change seamless and pain-free.
However, you will still need to include PAYG Withholding, PAYG Instalments, Fringe Benefits Tax, Fuel Tax Credits, Wine Equalisation Tax and Luxury Car Tax if they are required for your business, in your reporting.
So, maybe we should blow the ATO a kiss to thank them for simplifying the lives of business owners and our bookkeepers come July 1 … and then we can wait for the next revolution from the ATO (Single Touch Payroll)!
If you have any questions or would like further information, please do not hesitate to contact The Money Edge bookkeeping team on 07 4151 8898.
Kath Clarke | Bookkeeper | The Money Edge | Bundaberg