You can claim a credit for any GST for most business purchases, however, you must be registered for GST to claim GST credits and there are some things that you are not permitted to claim for or are GST-free.
- If your suppliers aren't registered for GST, you will be unable to claim GST credits. This applies even if you are given a tax invoice with an ABN and GST amount on it. The ATO app allows you to check if your suppliers are registered for GST.
- Basic foods, some medical goods or services and other items are GST-free.
- You can only claim the amount of GST shown on the tax invoice.
- If you use an item for both personal and business use, remember that you can only claim the business portion.
- There is no GST on wages you pay to staff.
- There are also some property transactions for which you are unable to claim GST credits, e.g. when buying a property using the margin scheme or build-to-rent developments.
Remember – it’s really important to keep hold of your tax invoices as part of your record keeping, and that a four-year time limit applies for claiming GST credits.
You claim GST credits in your business activity statement. If you’d like help and advice with this, contact us today for a free initial consultation.
Date published 10 Feb 2021This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
Sign up for our newsletter
Receive important tax news suitable for business owners and self-employed professionals.
Choose the right accounting firm for you
Running your own business can be challenging so why not let TaxAssist Accountants manage your tax, accounting, bookkeeping and payroll needs? If you are not receiving the service you deserve from your accountant, then perhaps it’s time to make the switch?
We specialise in supporting independent businesses and work with over 2,500 clients. Each TaxAssist Accountant runs their own business, and are passionate about supporting you.
We enjoy talking to business owners and self-employed professionals who are looking to get the most out of their accountant. You can visit us at any of our locations, meet with us online through video call software, or talk to us by telephone.
Changing accountants is easier than you might think. There are no tax implications and you can switch at any time in the year and our team will guide you through the process for a smooth transition.