DISCLAIMER: the information contained in this tax tip are general comments only and do not constitute or convey advice perse. Individuals should seek their own independent advice from a qualified advisor to ascertain how the taxation law applies in their individual circumstance. The information contained is given in good faith and is believed to be accurate. However, neither Childcare Accounting & Financial Services nor any of its employees give any warranty of reliability or accuracy nor accept any responsibility in any way including by reason of negligence for errors or omissions herein.
CALCULATING GST
How do you calculate the GST you are entitled to claim on your day care purchases?
If you are registered for GST and lodge an activity statement you are entitled to claim the GST you pay on your business purchases.
In many cases the amount of GST you paid is shown on the invoice you receive from the supplier. However in some cases there will be a message on the invoice which states something similar to "This amount includes GST".
When the actual amount of GST is not shown, and it has the statement indicating GST is included in the price, the way to calculate the GST is to divide the entire amount by 11. For example if you purchased something for $198.00. You would calculate your GST as follows:
$198.00 ÷ 11 = $18.00
It is important to note that if you use an item or service you purchased for both day care and private purposes, you are only entitled to claim the GST in accordance with your business use. For Example, if the above item purchased for $198.00 was a household item used only 50% for day care, you would only be entitled to $9.00 or 50% of the GST paid.
If you are registered for GST and lodge an activity statement you are entitled to claim the GST you pay on your business purchases.
In many cases the amount of GST you paid is shown on the invoice you receive from the supplier. However in some cases there will be a message on the invoice which states something similar to "This amount includes GST".
When the actual amount of GST is not shown, and it has the statement indicating GST is included in the price, the way to calculate the GST is to divide the entire amount by 11. For example if you purchased something for $198.00. You would calculate your GST as follows:
$198.00 ÷ 11 = $18.00
It is important to note that if you use an item or service you purchased for both day care and private purposes, you are only entitled to claim the GST in accordance with your business use. For Example, if the above item purchased for $198.00 was a household item used only 50% for day care, you would only be entitled to $9.00 or 50% of the GST paid.