Q	Just thought I would seek some feedback/comments from other bookkeepers concerning an issue that crops up from time to time. The scenario goes something like this:   You take on a bookkeeping job for a new client. They have been keeping a manual set of accounts, no computer, no software etc. After a period of time, they decide that they want to do the bookkeeping in-house, purchase the software and hope that you will train their receptionist how to do your job!   Then comes the crunch - they want you to load your datafile onto their computer "so that they can continue where you left off". When this happens, I have no problem assisting in every way with opening balances, transaction history reports etc. But I do have a problem just handing over my datafile, because it contains methods and procedures that I have developed over many years, and it doesn’t seem fair that someone can just look back and copy previous transactions. I know there are legal issues here concerning copyright, creation of the work, employee/sub-contractor issues etc. but I thought I would "feel the water" to gauge whether I am being unreasonable or not.
A	You should provide the data file to the client.   It is a long tried principle in law and database that the data that has been processed belongs to the client.  So at the very least you need to export all the data you have processed and provide it to the client probably in a form that they can read.     I presume you have been working with the data on your own computer maybe even at your premises to work within your MYOB licence?!   The client engages a bookkeeper to process data and create the business records that they are required to keep.  Those business records are records of the client and not of the bookkeeper and the client must produce them to various authorities in various circumstances.   I believe that is it reasonable for the client to expect that you provide a copy of the MYOB datafile if they have engaged you on that basis.  Why the "if"?  The only way I believe you can not provide the file is if the client only engaged you on the basis that you would NOT provide the processed data in the MYOB file format, but simply the output.  This would have had to be agreed in writing up front.
Q	Could you please clarify the following.   I have been told by ATO and numerous others that only taxable income should be shown in W1 on the BAS.   An accounting firm has advised me to put all income in W1 to include allowances etc. ( they also rang ATO and were advised differently to me).   Do one know as the ATO sure don’t seem to.
A	The BAS Instructions guide original states to include all allowances in W1   Current ATO website at http://www.ato.gov.au/businesses/content.asp?doc=/content/24341.htm&page=4&H4 confirms this
Q	I read some literature about Input Tax Credits, and I wondered whether my other client who is a restaurant can claim Input Tax Credits for all the GST Free food they purchase in order to sell meals with GST…?
A	No you cannot claim GST input tax credits when you didn’t pay GST on the purchase
Q	Should the code for bank charges (like account keeping fees) and interest paid always be INP?  (I had been entering them as FRE – will that have affected the BAS figures in any way?
A	Bank charges – no not always INP.  In fact it is a very rare circumstance that they would be INP officially.  INP relates to expenses that are purchased for the making of an input taxed supply.  What is an input taxed supply?  A: Earning of interest or residential rent etc.   Most bank charges do not have GST on them so you are correct that therefore they should be entered as FRE   Some bank charges with GST on them (ie merchant fees) where that fee is incurred in the normal trade of a normal business is allowed to claim that GST back so therefore the correct code would be GST.   Normally FRE.   The fact that you may have used FRE instead of INP on bank charges with no GST on them has absolutely no effect on the ultimate GST amount paid or refunded and therefore no it is not an issue to go back and fix.  The reports in the G boxes may be slightly wrong but don’t worry about it.
Q	Employees are paid to electronic clearing account, how do you clear this account to come out of the cheque account using MYOB?
A	The simple answer is you “Prepare Electronic Payments”  This process groups all the payments together as one electronic payment out of the bank and tries to create an electronic payment file.   If it was a mistake to use the electronic payments then do them one at a time and then the cheque account will have a payment for each cheque.
Q	If a business is registered for GST on a set method.    Can they change their method, from non-cash to cash or monthly to quarterly?    If  they can change how is this done?
A	Yes in theory, however ATO is reluctant to allow a business to go from non-cash back to cash reporting   Have the client contact the ATO about a change in their registration details
Q	If you receive a receipt for $40.00 without an ABN is it possible to claim a tax credit?   I suspect it is because the amount is below the $82.00 - $50.00 threshold.   But I just want to be sure.
A	You are partially correct as you do not need a tax invoice in order to be able to claim GST when it is below this threshold.    However a different section of law states you must withhold tax from any payment to any business without an ABN unless you have a statement that it is a home hobby from the supplier.   In practical terms for GST they may take it one step further and require an ABN even below the threshold.  I will check this and advise next week (I am having the rest of this week off)
Q	Apart from looking at the BAS how can you determine if the client is registered on a cash or accrual method?
A	Tax office information only – so maybe through the portal access to client records or by contacting the client.
Q	How do you handle the GST for a computer that will be used 80% for the business and 20% for private use?
A	Split the payment into a GST portion and a non GST portion
Q	If rent is deducted by direct debit what type of evidence does the business require in order to claim the input tax credit? Is an invoice for each month necessary?
A	There is a concept of an invoice that covers a monthly payment over an extended period “Recurring Invoice”. So a document may be provided at the start of the lease that is considered the tax invoice for each month
Q	I have one client with unionised workers.    At the end of the calendar year my client pays the workers the unused Annual Leave.    When an employer pays out the unused annual leave to their employees at the end of the calendar year and the employees are continuing to work  for the company - no termination  of employment occurred , should the employer pay them the 9% Super on the  unused Annual Leave portion of their pay?   And what is the situation like considering the unions weekly amount of Super - should it be paid twice for one week?    The ordinary times earnings (the base for Super calculation) includes the "remuneration while on annual leave". But the workers in this case were physically working, they were not on annual leave
A	This is really a question for the employers Employment relations advisors ie vecci or ABL (now renamed) or possibly the union   Its subject to the way their award reads an given the obviously unionized nature of the business seem bad to get it wrong.   In General terms I believe it would be subject to SGC   Given the nature of the payment it would seem that the common sense answer is also that Super should be paid.  If the worker had taken the time off they would have been paid this money and super would have applied.  It was to the employers advantage to have them work (presumably) therefore to dock them reward (ie the SGC amount) because they worked seems a little unfair.   I also think that you would simply alter the pay amount for the week in the superannuation calculation ie pay more super for the week – not pay two lots of super.
Q	I would like your advice in regard to the BAS Service Provider legislation.    Currently I have 10 clients that I lodge BAS statements for, either by mail or on the ATO Business Portal.  I am working under the provision that I am supervised by a Tax Agent as I have contact with each of these client’s tax accountants.   After reviewing recent ICB Newsletters and researching the ATO Webite (including the new self assessment tool), I am not sure that I have a close enough relationship with these Tax Agents.   I would like to rectify this situation before the December 07 BAS is due, but am not sure of the best way to do this.   As I see it, there are several options, please see below:     * I could enter the data, reconcile and then forward the MYOB file and GST Reports to the Tax Agent for them to lodge the BAS.    * I could enter the data, reconcile and then forward the MYOB file & GST Reports to the Tax Agent for review, I then lodge the BAS on the BAS Service Provider Portal.   Whatever I decide I would need to communicate the change in process to my clients and set up arrangements with the various Tax Agents.  Before I do so I would appreciate some feedback from ICB, to ensure that I make the correct decisions
A	It is the actual lodgment of the BAS that trips you over the line in relation to the current legislation.   We have implemented the ICB BAS Preparation program through the partnership with Australian Bookkeepers Network and their BAS Wizard Program.  This program uses the ABN system to provide that Tax Agent Quality Assurance that the ATO guidelines speak about.   The current guidelines from the ATO do not require that you have every BAS reviewed by the tax agent but that the tax agent is taking a degree of review and quality assurance review over your work in relation to the BAS.  However I see you have referred to the Self Assessment program and you must be satisfied that you do comply.   Another option is to do your work up to and including providing a BAS like report out of the software.  Provide this to the client for their lodgment of the BAS.  This complies with the ATO guidelines of using commercially available software.   We recommend that you work with your clients tax agent (your option2).  Provide them with a copy of the ATO guidelines about their part in the BAS preparation process that allows you to assist the client under the presumption that they are involved.  ICB members resources include an agreement that is signed by each of the tax agent, the client and yourself to ensure the arrangement and understanding of each of you roles is known to each of you.  The agreement itself is not enough, action in accordance with the agreement is proof of the arrangement.   Secondly look at the ABN BAS Wizard program.   Both of these options also position you well for the introduction of the proposed new system of registered BSPs.   Thirdly provide the reports to your clients but make them aware that you cannot legally lodge them on their behalf – they must.   You may not legally lodge a BAS on behalf of a client unless you are guided by a tax agent in doing so.   Hope this helps
Q	My client's total cost for Sensis is $9171.80 inc GST he is making a payment of $1000 and I believe he can claim GST $833.80. Please advise how to enter this in MYOB, and how to rectify if previous bookkeeper didn't claim it for him.
A	The best practice may be to enter the Sensis account as a single "total" bill for the entire contracted amount using the transaction date as the date shown of the Tax Invoice, and use the correct GST Tax Code and account allocation as appropriate to your business.  Then, no further monthly invoices need to be entered (even though Sensis will continue to send you a monthly statement invoice of monies due), and simply apply any payments as they are paid and apply them against the balance owing - the CASH reporting in most accounting software should set up so as to process the GST liability correctly.   Sensis are on a GST accrual system and would need to pay the entire GST shown on the Tax Invoice as collected even though they have not received the total payment.  Although Sensis indicate on the initial bill that all of the GST amount is payable with the first instalment, this seems to be a ploy and a possible play on words to justify getting as much money up front with the first payment.  They could have also said that would only enter a payment contract if the initial bigger payment of $1000 followed by $X equal monthly payments.  This seems to work for them as I assume this unusual business practice results in significantly helping their cash flow.....  In effect, you are simply paying them more up front thereby reducing the credit risk on their part.  Consider the Sensis bill much like a HP payment if you are on a CASH system, of where you can only claim the GST portion of any actual individual payments made over the term of the contract.   Because of your question, I will assume that your client may be using the BAS CASH lodgement reporting.  If this is the case, on CASH reporting for the total Tax Invoice amount you may be only able to claim in this case 1/11th of the actual individual payment amounts.  On an ACCRUAL reporting basis, all of the GST can be claimed on the invoice date, irrespective of when the payment is made.   Further, if this bill is a prepayment, then you may wish to allocate this to an Asset Prepayment account and amortise the net amount excluding GST each month by crediting the asset account and debiting the relevant expense account using the N-T not reportable on the BAS tax code - that way, you are amortising the monthly amount across the entire year.   In any event, please request written confirmation from your client's Registered Tax Agent on how you treat this expense.
Q	As regard to GST that wasn't claimed by the previous bookkeeper I read 'Making the most of MYOB Veechi Curtis' regarding GST paid in advance, she stated that GST can be claimed on each instalment using GST as the tax code, and that is what the previous bookkeeper had done. my next step is to search Veechi Curtis' 'Making the Most of MYOB vol 7' also the local MYOB representative, who has cost me hundreds of dollars, and then some of Veechi's answers are different to his.   I was a member of MYOB but, most of the time they just emailed me a support note. I am just about to fill out the application for TAFE OTEN Cert lV to learn more, but I don't think this will help me with question's that need to be answered.   Would you be able to advise me on how to find someone or an organisation that can help me?
A	Your initial answer in claiming the relevant 1/11th GST portion per payment seems be okay and also what the previous bookkeeper had done.  remember that by entering contract bill (total) as one purchase, then each payment applied would have taken care of the automatic GST Cash calculation amount.  The example suggestions I provided were based on insufficient information and more so on assumptions on my part.  Ultimately I hope that my answers did make sense and reinforced what you were thinking.   Now, in regards to you furthering your professional development, please check out the www.icb.org.au home page > What to Study, and also Where to Study.  As ICB is not a RTO (Registered Training Organisation), we will only be making recommendations on what to study and where, based on the Legislative 251L requirement.   In all fairness, typical supplier invoices like Sensis and perhaps Customs Agents just to name a couple,  are not part of the normal every day data entry scenarios.  Whilst I would imagine that some Tax Agents/ Accountants may have first hand experiences at entering these type of transaction in relevant accounting software, very few would have the experience to guide you in these areas.  Unless the TAFE instructor is also an experienced and current MYOB Certified Consultant, they may also not be experienced in dealing with these type of transactions.
Q	This was an answer I received regarding import / export from a third party. 'For the shipments that are imported and customs declaration with the duties and GST involved, the accountant mentioned that when you put that into Myob if once its entered you go down the bottom of the screen to GST even though you've put  NT on the file - you go down the bottom click on the GST/Tax button and type in the full amount of gst and click 100%'. Do you understand this? If so please tell me!!!!
A	Okay, the dreaded Customs Invoice of where you pay the GST only component of the original supplier imported goods!    Right, the original overseas supplier bill for goods where the GST is paid through the customs agent should be using N-T (Not Reportable on the BAS).  I would recommend perhaps setting up a new overseas purchase Tax Code of NOP (i.e. Not Reported - Overseas Purchase) with a Zero GST% for any such items imported only of where the total GST for the imported shipment is ultimately paid via the Customs Agent.  For all other imported Goods, Services, Charges and overseas travel for example that do not involve a Customs Agent GST payment, you should use the FRE Tax Code.  You could also use a special FOS tax code (Zero% GST) to highlight these overseas supplies where the GST is not paid via the customs agent.   When the Customs Agent invoice arrives, this can usually be entered as a Purchase Misc type.  For the total GST amount only shown on the customs agent invoice  multiply this amount by 11, for example $1,000 GST only x 11= $11,000 total including GST.  Assuming that your invoice is selected to show amounts including GST, you would enter the first line on the invoice as follows:         GST Customs Agent        5-XXXX  OS Purchases    11,000    GST   The second line then is entered as follows:         GST Customs Agent 5-XXXX    OS Purchases   -10,000    N-T   You will then note that the Tax Calculation in the purchase should show the correct $1,000 GST paid.  If you then go CTRL+R (Recap), the transaction details should show something like this:                 2-XXXX        Trade Creditors                 1,000Cr         5-XXXX        OS Purchases     10,000Dr         5-XXXX        OS Purchases                  10,000Cr         2-XXXX        GST Paid             1,000Dr   As you can see, the OS Purchases (expense) is in effect zero, however the GST is reported correctly for that relevant BAS period in all GST reports including MYOB BASLink.  Then, simply continue applying line by line the additional fees and charges, with GST or FRE (or N-T for Duty) as applicable.  Whatever you do, DO NOT CHANGE the Tax zoom arrow calculation as you have stated, as the relevant line items on the purchase would not equal the total including GST to be equal to 1/11th.  Because you are accounting for the GST on the BAS for this period by having the total purchase including GST be shown in the G11 field from the Customs Agents bill, you need to use a not reportable tax code (i.e. NOP) when entering the original overseas supplier invoice as mentioned earlier.  Otherwise, if for example you had used FRE for the original overseas supplier bill, the amount in G11/ G14 would be grossed up by $10,000 respectively thereby overstating your purchases for the relevant BAS period.    There is a further example on the MYOB support Notes ID 9282
Q	I was handed a very interesting query today that dealt with New Zealand companies selling goods in Australia. This issue is from the NZ side but I the situation is the same for Australian companies selling goods in New Zealand.   I was directed to the ATO document found on this link http://www.ato.gov.au/businesses/content.asp?doc=/content/50678.htm   Example 1 applies to the company in question.   As I understand this document, the NZ Co would export the goods to their Non Resident’s Australian Co and the Non Resident’s Australian Co would sell the goods to the end user. The Non Resident’s Australian Co would collect GST from the sales to the end user and paid the Australian ATO. The Non Resident’s Australian Co is importing the goods so they would pay the GST to the custom agent and claim this GST back from the Australian ATO.    In the NZ Co’s books the sale would be an export and not attract GST.   The client has an Australian ABN. They want to raise the invoice in their NZ company database. They have set up a GST of 10% and I assume have a suitable invoice layout to comply with Australian GST standards. (They have a software issue because the sales must be shown in their GST return as a GST free sales but this issue is not important.)   I am not sure if the custom clearing company applies GST to the goods when they arrive in Australia or since the goods are on a Tax Invoice shown an Australian ABN and Australian GST that no GST is applied by custom agent. (I have queried this with the NZ support consultant.)   My query is how the Australian GST is treated in the NZ company’s accounts.   As things are set up the GST component will become a GST liability in the Balance Sheet. I think it should be treated as income the same as ‘packaging and handling’.   I have seen the same set up in an Australian company selling to New Zealand.   What is correct?
A	If I understand you correctly:   NZ co exports from NZ into Australia and to an Australian company registered for GST in Australia   In NZ it is an export and I therefore believe there is NO GST on their sale   In Australia the import will come through customs Customs will add GST to their documentation and the amount of duty etc to be paid to them will include the GST Customs will provide the documentation including a relevant TAX INVOICE   The Aust importer pays the NZ company for the raw supply without GST and with no claim for GST The Aust importer pays customs its duty and GST It is this amount of GST the Aust company claims back   SO There is no GST in the NZ company’s accounts!
Q	I'm trying to find out whether to use the code "FRE" or "N-T" for rates (for properties) in MYOB.  The MYOB support notes are somewhat helpful regarding the difference between the two, but don't really help me clarify which code to use for rates.    Which code should I use?    And do you have a good definition for deciding which code to use in other circumstances?  (I understand it's N-T if it "falls outside the GST net", but I'm not quite sure what does and doesn't!).
A	It really depends on the GST status of the entity and also the nature of the property   In general terms   FRE:  is what is used where you have a GST registered entity and the expense is towards a GST Taxable supply ie commercial rent income and if the expense then has no GST on it, therefore it is free of GST.   If the expense has GST on it and you allowed to claim the GST back because it is in relation to a GST Taxable supply ie commercial rent income then you use the GST code and claim the GST back.   If the expense of rates relates to a residential rental property (which by law doesn’t have GST charged on its income) then the expenses that may be incurred that do have GST on them still do not permit you to claim GST back.  These are coded INP BACK