Issue Forty Two, August 2010
CHECKLIST FOR A GST RATE INCREASE
COMING UP IN THE NEXT TAX TIDBITS
DID YOU KNOW?
CHECKLIST FOR A GST RATE INCREASE
There are a number of points that businesses should consider regarding the change in the GST rates. The following checklist is a summary of the minimum consideration required;
- Do the terms contained in your contracts allow you to increase the price that you charge your customers to cover the GST rate increase? If your existing contracts state that the price charged is "plus GST" the Goods and Services Tax Act 1985 allows for prices to be increased by the amount of the increase in GST. If your existing contracts state that the price charged is "inclusive of GST" then further consideration is required as to whether your legally entitled to increase the price to reflect the increase in GST.
- Do your accounting and reporting systems need to be changed?
- Can your accounting system issue correct tax invoices or credit notes at both the 'old' and the 'new' GST rates?
- Can your accounts payable system distinguish between tax invoices at both the 'old' and the 'new' GST rates?
- How can you maximise opportunities that may arise from the potential increase in consumer activity in the period before the GST rate increase?
- How is the change in the GST rate going to alter your position with respect to funding and your cost base:
- If you are registered for GST on a payments basis what adjustments do you need to make in your GST returns surrounding the change in the GST rate?
- Have you started to compile a list of automatic payments both received and paid that will need adjusting?
Coming up in Tax Tidbit - September 2010
We will provide a case example of how you adjust your GST return for the period ended September 2010 to account for the change in the GST rate.
Did You Know?
HWI can assist you with sourcing, installation and customisation of accounting packages that will meet your accounting and reporting requirements.
HWI is able to prepare the budgets and cashflows required by lending organisations when you are applying for financing.
Disclaimer Information contained within this document is of a general nature and does not constitute advice. Readers are cautioned not to act or reply on it without first seeking professional advice. The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
