Are you claiming the correct GST?

   Posted by Admin

If your suppliers aren’t registered for GST, you can’t claim GST credits. That applies even if they give you a tax invoice with an ABN and GST amount on it.

  1. Use the ABN Lookup online tool to check if your suppliers are registered for GST.
  2. Things such basic foods, some medical goods or services and other items are GST-free.
  3. Check your tax invoices and only claim the amount of GST shown.
  4. If you use an item for both personal and business use, you can only claim the business portion.
  5. There is no GST on wages you pay to staff.
  6. There are also some property transactions where you can’t claim GST credits. For example, you can’t claim GST credits when buying a property using the margin scheme or build-to-rent developments.
  7. As part of your record keeping, remember to keep your tax invoices.
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Setting up an SMSF can be complicated.  Not getting it right can materially affect your financial situation and retirement plans.
The first question you need to be sure about is whether an SMSF is the right fit.  Seeking specialised financial advice can help you determine this answer. Some considerations include:
Low balances
You must ensure you have an appropriate superannuation balance before considering an SMSF. While a low balance can be a red flag, it is not always a barrier to entry.  Establishing an SMSF with a small balance may not be in your best interests. This is because SMSFs tend to be more cost efficient with larger balances. Therefore, before rolling over your superannuation balance to an SMSF, you should establish and justify that by doing so you are likely to end up in a better position in retirement.
You must also understand your motivation for establishing an SMSF. The most common motivation SMSF trustees indicate is control. Control of an SMSF allows individuals to have a wide range of investment choice, flexibility and engagement with their superannuation. However, superannuation law is complex and you need to ensure your ambitions are allowed under the law and will be able to achieved in an SMSF.
Costs and time
SMSFs incur a wide range of costs in establishment and the day to day running of the fund. Ensure you are across the estimated establishment, accounting and audit costs that will be incurred by your SMSF. Speak with your advisers so you are across all other incidental costs, which unlike large super funds generally occur with fixed rates rather than as a proportion of your balance.
SMSFs also require dedicated attention from trustees which will take time out of your daily life to manage. Understanding from the outset your legislated responsibilities and obligations before establishing an SMSF is important.
Establishment process
Once you have decided that an SMSF is right for you, the process of establishing the fund can commence. A Specialist SMSF adviser is the best person to help you with this process which generally involves choosing a trustee structure, selecting a trust deed, completing the ATO registration, opening the fund back account and arranging for rollovers to the fund to occur.
Investment Strategy and Insurance
Upon establishment you must also create an investment strategy which must be regularly reviewed.
Your investment strategy should be in writing and must consider:
     •     Diversification (investing in a range of assets and asset classes).
     •     The liquidity of the fund’s assets (how easily they can be converted to cash to meet fund
     •     The fund’s ability to pay benefits (when members retire) and other costs it incurs.
     •     The members’ needs and circumstances (for example, their age and retirement needs).
     •     Whether to hold insurance in your SMSF.
Property investment
It is also common for SMSF trustees to be motivated by investing in property when establishing an SMSF. You should be sure that any investment in property, particularly when gearing is involved, is appropriate for your circumstances. Holding properties in an SMSF can also require some complex structures to ensure the law is being followed and specialist advice may be needed before making an investment choice. A lack of diversification, low balances and inappropriate property investments can have a detrimental impact on your retirement savings.
How can we help?
If you are considering an SMSF, please feel free to give me a call to arrange a time to meet so that we can discuss your particular requirements and circumstances in more detail and direct you accordingly.
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