Due to the GST rate change you will need to update accounting processes and software, track invoicing, receipts and payments with your suppliers and customers.
The purpose of this e-mail is to ensure GST on goods and services bought or sold before or after the GST rate change is accounted for at the correct GST rate.
In order to get through the transitional period the IRD requires you to use a one off adjustment form (GST 105) when completing the GST return for the period ending 30 September 2010. This form is only used to make the calculation, it is not sent to IRD, it will be supplied with your September GST return. The result of the calculation will go in the adjustment box on your September GST return.
Those on a GST cash payments basis
You will need to compile a list of your GST inclusive debtors and creditors at 30 September 2010 and use this list to complete your GST 105 form, and you are required to account for:
· all goods and services purchased on or before 30 September 2010 where full payment has not been made by 30 September 2010 (Creditors).
· all goods and services sold on or before 30 September 2010 where full payment has not been received by 30 September 2010 (Debtors).
Those on a GST invoice basis
The GST adjustment is limited to second hand goods purchased before 1 October 2010 from non-registered persons where full payment has not been made by 30 September 2010. Your only adjustment is:
· to claim GST the value of the goods purchased, but not yet paid for, i.e. GST on the amount owing.
IRD Will send a GST 105 form and calculation guide with your next GST return.
For the few clients whose GST return period straddles the change over date i.e. you have a September/October GST period, you will receive a 2 part GST form – for transactions up to 30 September at 12.5% & after at 15%. You may also need to complete the “change of rate adjustment “ form 105.
Here are two links to the IRD website, which may help answers your questions.
http://www.ird.govt.nz/changes/gst/businesses/adjust-rate/ and http://www.ird.govt.nz/changes/gst/businesses/
Important note – For those clients where Johnston Associates completes your GST return:
If you are on cash payments basis we require a list of your Debtors and Creditors at 30 September. If you are unsure of your GST basis, please call us on 09 361-6701.
If you are on an invoice basis please advise the remaining value outstanding on second hand goods purchased before 1 October from non GST registered persons.
All clients where Johnston Associates prepares GST returns will receive e-mail reminders in the weeks ending 30 September 2010 and 8 October, to send the information to our office by no later than 15 October. There will be a lot of work in order to complete the adjustment therefore if you send your information in after the 15th of October we cannot guarantee your return will be filed on time.
Kind regards
THE TEAM AT JOHNSTON ASSOCIATES
