Australian BAS with GNUCash
Ben Stanley
bds02@uow.edu.au
Fri, 27 Apr 2001 16:08:49 +1000
I had an interesting conversation with Goonie regarding filling in my
1st Quarter BAS. I thought I'd post it here in case anyone else might
benefit. I have put some extra information at the end of the
conversation pertaining to calculating the gst-free amount which was not
covered in the conversation.
<ben_> I did my first BAS recently. I think my experience may prove
useful...
<goonie> it certainly will.
<ben_> I think I have distilled a procedure to complete the next one.
Here's what I did:
<ben_> 1) Sort out my account structure so that I have the information
required by the BAS in my accounts
<ben_> (This actually involved recording 2 separate accounts for GST
paid! one for captial acquisisitions, and another for normal expenses)
<ben_> 2) Come up with a bunch of reports which gives me the various
numbers for the boxes on the BAS
<ben_> 3) Copy the totals from the reports into a StarOffice spreadsheet
representing the BAS form
<ben_> 4) The spreadsheet then calculates everything else.
<ben_> 5) Copy the numbers onto the BAS form and post it off.
<ben_> Now, this could be streamlined if GnuCash could do the stuff the
spreadsheet currently does, perhaps in a specialised tax report.
<goonie> obviously, we should be able to eliminate a few of those steps
along the way with the right kind of tax reports :)
<goonie> s/specialized/specialized-and-jurisdiction-specific
<ben_> Exactly.
<goonie> but, yeah, that's one thing that really should go into "after
1.6".
<ben_> I already suggested that we need to be able to cater for
multi-nationals who might need to submit multiple tax returns...
<ben_> Yes, of course this is post-1.6.
<ben_> so each tax report needs to have it's own unique identifiers/tags
attached to the accounts.
<goonie> yep.
<ben_> And you would have a different tax report for each
nationality/jurisdiction.
<goonie> probably.
<ben_> The biggest problem that I can see is structuring the accounts to
start with so that you have the information to fill out the tax return
properly.
<goonie> There will hopefully be some commonality between them (shared
functions).
<ben_> Yes, I imagine so.
<goonie> ben_: wrt structuring accounts, that's also absolutely correct.
<goonie> which will require both documentation and the new user setup
tool to assist in getting right.
<ben_> goonie: Yes, I hadn't thought of the setup tool helping here.
<ben_> I was talking with an accountant, who does accounts for all the
Anglican private schools in Sydney.
<ben_> He said that they attach a code to each (effectively split) in a
transaction which determines where it is included in the tax report.
<ben_> The person doing the BAS gets to double check that all these tags
are correct...
<ben_> That sounds like it's very flexible, but a giant headache...
<goonie> ben_: we can do it that way, but it might be easier to tag
accounts.
<ben_> I think that the correct level of abstraction is the account
level. I think that we should attach tags giving the question that this
account should be included in.
<ben_> This will make some things difficult, but most things easy.
<goonie> yeah.
<ben_> Now, there was a suggestion on the mailing list that we should
allow some accounts to be marked as 'old', or 'unused', so that they
don't appear in the chart of accounts.
<goonie> yep.
<ben_> However, they would still appear in the transactions to which
they pertain...
<ben_> I would really like to see this implemented. (I know it's post
feature-freeze for 1.6...)
<ben_> I suppose I should submit it to the wish-list...
<goonie> yep.
<ben_> I suppose we need to think about a proper way of closing the
year's accounts as well, but this would be an interim solution.
<ben_> for some problems.
<goonie> yep. There was ML traffic about closing accounts a little
while ago.
<ben_> BTW, I saw in the BAS that if you use an accounting program, it
is required by the ATO to have an audit trail...
<ben_> I'll go look up the exact wording...
<goonie> that's very interesting.
<ben_> I'm still looking... I was quite confused as to what an audit
trail might mean...
<goonie> Do they realize that on an insecure operating system (99% of
the systems used out in small-business-land), any user can compromise
that audit trail with a text editor?
<ben_> Hmmm... It's a bit harder if the file is encrypted and
password-protected, as is typically the case...
<goonie> does Quickbooks really encrypt its data file?
<ben_> goonie: I can't verify that.
<goonie> no, but it's something I can and probably should find out.
<ben_> BTW, the ATO requires that you submit the BAS on THEIR form - not
something you printed out of your accounts software... I suppose that's
because they've got all sorts of OCR registration marks printed on it.
<ben_> But I suppose that we could construct a report which would
over-print the numbers onto their form.
<goonie> ben_: that may be difficult with the current reporting system.
<goonie> but longer-term we need something that can print invoices etc.
onto pre-printed stationery anyway.
<ben_> You would not be able to allow a custom-style sheet to be used on
that report!
<goonie> ben_: it's a totally different way of thinking to the current
reports - in my view so different we will probably need an entirely new
piece of infrastructure to do it, which will be complementary to the
current one.
<ben_> Found it.
<ben_> BAS instructions pg 30
<ben_> Calculating GST using accounts option
<ben_> Hmmm... It seems that there are two methods of filling in the
BAS...
<ben_> 1) fill out the entire form (which is a real pain in the neck),
or
<goonie> only fill out a couple of boxes . . .
<ben_> 2) If you satisfy certain record-keeping requirements...
<ben_> you get to fill in only 10 boxes.
<ben_> The requirements are:
<ben_> You may use this option for reporting only if you have record
keeping and accounting systems that:
<ben_> * can accurately provide details of the amount of GST payable and
the amount of input tax credits to which you are entitled according to
the law, and
<ben_> * incorporate proper audit trails.
<goonie> presumably, some part of the tax act defines "proper audit
trails".
<ben_> To meet these requirements your accounting system must:
<ben_> * For each transaction involving a taxable supply, record the
amount of GST payable and correctly bring these amounts to account in a
GST payable account.
<goonie> check.
<ben_> * For each transaction involving a creditable acquisition or
creditable importation, record the amount of input tax credit to which
you are entitled and correctly bring these amounts to account in an
input tax credit control account.
<ben_> * For each adjustment that increases your net amount, record the
amount of the adjustments and correctly bring these amounts to account
in either a GST payable control account or a GST adjustments control
account.
<ben_> For each adjustment that decreases your net amount, record the
amount of the adjustment and correctly bring these amounts to account in
either an input tax credit control account or a GST adjustments control
account.
<goonie> hmmm. I *think* we make gnucash do all of the above easily
enough . . .
<ben_> Then it goes on to tell you how you can fill out your BAS
according to the 'simplified' accounts method...
<ben_> I think that our compliance would depend on how the accounts were
set up. Gnucash can support all that is required, I think.
<ben_> I think that the compliance of a company is heavily dependant on
the knowledge and honesty of the user...
<ben_> Anyway, I filled out every box. I think that we could even
program Gnucash to do every box without a whole lot of difficulty. It
just means that the user has to keep everything up to date...
**********************************************
Calculating GST-Free amounts
The BAS requires you to fill in a box (G14) of 'Acquisitions with no GST
in the price'. Now, if you have structured your accounts such that any
GST component of a transaction is connected to an Assets account such as
"GST Credits", then it is not obvious how one would obtain the answer to
this question. This assumes that when you receive a Tax Invoice, you
create a transaction such as
29/4/2001 Woolworths 50.25
Assets:GST Credits 2.64
Expenses:Foodstuffs 47.61
Cash 50.25
That is, you only record the pre-GST amount as an expense, because you
get the GST back (if you are a business...). Note that in this example
the GST is not 1/11th of the total... This commonly happens on grocery
receipts, because some food has NO GST.
To calculate the amount at G14, you do this:
1) Obtain the total of your GST paid (total of transactions into the
GST credits account, not including any amount paid back by the ATO).
2) Obtain total of expenses without GST (eg total in Expenses:Foodstuffs
and other Expense accounts).
3) Calculate expenses_GST_free = expenses_before_GST - 10 * GST_Credits.
This is the amount you would write at G14 on the BAS.
Use of this formula will not only find for you those transactions which
have NO GST, but also those transactions which contain only some
GST-free items.
I had called up the ATO to query them about this, and the silly person
told me that I needed to keep a separate categories for GST items and
GST-Free items. This seemed patently ridiculous to me - I'm glad that I
spent some time thinking before re-arranging my accounts.
Ben.
--
Ben Stanley | barf [ba:rf] 2. "He suggested using FORTRAN,
PhD Student | and everybody barfed." - From the Shogakukan
SITACS | DICTIONARY OF NEW ENGLISH (Second Edition)
University of Wollongong |
Australia | http://www.uow.edu.au/~bds02