YOU
NEED TO BE SURE THAT YOUR SUPPLIERS ARE REGISTERED
FOR GST?
We recently had occasion
to assist a new client who was undergoing a GST
Audit.
He had been paying a number
of contractors based on what appeared to be valid
tax invoices. Because he was just starting in
business and had not yet been paid for work that
he had done, he submitted a BAS which indicated
that he was entitled to a substantial GST refund.
This prompted an audit
by the ATO.
When he submitted the
Tax Invoices to the ATO they advised that several
of the contractors were not entitled to issue
Tax Invoices or charge GST as, even though they
had a valid ABN, they had not registered for GST
because their anticipated turnover was less than
$50,000.
The net result was that
the ATO reduced our clients refund by several
thousand dollars and could have fined him for
making an incorrect claim.
On this occasion we were
able to plead his case and no penalties were applied
but he needs to be especially careful in future
as his file is now “marked” by the ATO.
He is entitled to claim
the excess payments from the contractors but they
no longer work for him and locating them has proved
difficult. In the end he wrote the money off to
experience.
THE LESSON:
Always check the
registration details of ABN’s on Tax Invoices
by going to business.gov.au (or using the link
from our web site). |
