Australian GST- Time to pay up

[John Ready]

> On Thu, 1 Sep 2005 22:42, you wrote:
> 
> >
> > So when I write out the Cheque (EFT in real terms) it is not an expense
> > that I am paying.  How do you classify your BAS (Business Activity
> > Statement) payment?
> >
> > I've got GST as a top level expense account, which accepts no entries, and 
> 'paid', 'paid - vehicle' and 'collected'. Obviously IANAA either, that's why
> 
> i've used real words. It isn't really an expense, I could alter that if i was
> 
> properly instructed
>
The problem is that though it's not a real accounting expense, from an Australian business point of view it 
is a real expense! I use four marker accounts (which total sub-accounts) being , Taxable Sales, Non-
Taxable Income (mostly bank interest), Taxable Expenses, Non-Taxable Expenses.  This helps fit the way 
the Tax Office likes the Total Sales and Expenses reported (then we have to divide them by 11 for tax). 
Then I have an Expense account called Net BAS Payments (over the year it will be an overall expense 
though the odd quarter may have a negative amount). Does this make sense? I realise it isn't strict 
Accounting but for a small business it works, it makes it easy to write Tax Reports, and the only hassle I 
have is that at the end of the year for my P&L I may have to add two travel expense accounts (taxable 
local travel, and non-taxable international travel) and two insurance expense accounts (taxable general 
insurance, and non-taxable life insurance). This seems easier than dividing every transaction. It inflates 
my revenues slightly, but then it does the same to my expenses, so my Net Profit is the same. 

Sorry if my reference to "taxable" is confusing. I use it in GST terms only in the above paragraph.

- John Ready