CALL US: (07) 3367 0999 | EMAIL US:

Easier GST reporting for food retailers

Many small food retailers buy and sell products that are both taxable and GST-free. Depending on the point-of-sale equipment used, identifying and recording these sales can be difficult for business owners.

The ATO has introduced a series of simplified accounting methods (SAMs) to make it easier to account for GST and work out the amount of GST that is liable at the end of each tax period.

There are five SAMs to choose from. The SAM you choose will depend on your business’ turnover, the nature of your business and the nature of your point-of-sale equipment (except for the purchases snapshot method).

These methods help you work out the information you need to correctly complete the GST section of your activity statement. However, they can only be applied to sales and purchases of trading stock.

Here is a summary of the five SAMs you can choose from:

  1. Business norms

Turnover threshold: SAM turnover of $2 million or less.
How you estimate your GST-free sales and/or purchases: You apply the standard percentages to your sales and purchases.

  1. Stock purchases

Turnover threshold: SAM turnover of $2 million or less.
How you estimate your GST-free sales and/or purchases: You take a sample of purchases and use this sample.

  1. Snapshot

Turnover threshold: SAM turnover of $2 million or less.
How you estimate your GST-free sales and/or purchases: You take a snapshot of your sales and purchases and use this.

  1. Sales percentage

Turnover threshold: GST turnover of $2 million or less.
How you estimate your GST-free sales and/or purchases: You work out what percentage of GST-free sales you made in a tax period and apply this to your purchases.

  1. Purchases snapshot

Turnover threshold: GST turnover of $2 million or less.
How you estimate your GST-free sales and/or purchases: You take a snapshot of your purchases and use this to calculate your GST credits.

After electing to use a SAM, you cannot change your method of GST accounting in the first 12 months.

Business
advice

taxation
planning

compliance
services

News

Investing in shares vs property in SMSFs

March 19, 2020

Shares and property are two popular investment options for those with a self-managed super fund (SMSF). However, they both have very different attributes and choosing the one that will achieve the best outcome for an SMSF depends on your personal goals and situation.

While the price of shares can vary drastically, property is a relatively stable asset, making it appealing to those who want more security and predictability. Property prices are also negotiable unlike shares, and you can generally borrow money at a lower rate for property purchases.

It may seem hard to find the perfect investment property, but older and undercapitalised properties can be renovated for profit. However, returns from property rentals can be dented due to factors such as land tax, utilities and rates, maintenance and tenancy vacancies.

Shares are more dynamic and volatile than property. One advantage is the accessibility of investing in shares, as you can enter the share market with a few thousand dollars – much less than what you need to invest in a property.

Maintaining a portfolio of quality shares that pay tax-effective dividends may be a good way to fund retirement. With the right portfolio allocation, shares also have the potential to provide a better, stronger income than property rentals, as long as that income is sustainable and increasing.

Property can generally be used as a wealth-creation tool, while shares can create a reliable retirement income. For those who can afford to put more money into investments, it may be a good idea to consider investing and diversifying in both. If you’re unsure about which investment option is right for you, seeking financial advice may be the best option.