The Otago Southland Employers Association is co-hosting seminars with Findlay and Co in Wanaka and Alexandra to explain how the recent employment law and GST changes may affect you. Drinks and nibbles will be provided.
Wanaka Topics: Employment Law and GST Changes Where: Lake Wanaka Centre, Ardmore Street When: Monday 6th September 5pm-6.30pm
Alexandra Topics: Employment Law and GST changes Where: Central Otago Education Centre When: Wednesday 8th September 5pm-6.30pm
How will you deal with the GST rate increase as part of your overall sales and pricing strategy? Will you pass on all of the GST increase, or will you fully or partially absorb the GST?
Yet again, will you take this opportunity to increase your price?
At the end of the day your pricing and therefore sales strategy will depend on the composition of your customers (are they GST registered or are they end users who cannot reclaim GST?), demand for your goods and services, not to mention your competitors’ reactions to the same issues.
You’ll need to update all of your marketing and sales collateral and that includes any web pages.
And here’s one of the big issues for retailers – you’ll need a plan for updating shelf and catalogue prices.
And a word on pricing… Check out the following price reduction and price increase tables... They challenge your thinking on price discounting and price increases don’t they?
If you need to cancel your GST registration but still own assets which you intend to retain after you have cancelled your registration, you'll need to account for GST on those assets as part of your GST cancellation.
You'll need to account for GST at the rate of 12.5% of the open market value up until 30 September. However from 1 October onwards any assets retained at the point of GST registration cancellation will need to be accounted for at the rate of 15%.
The GST transitional return is divided into two parts to account for the change in the GST rate.
Part 1 for supplies at the GST rate of 12.5%
In Part 1 you record your sales and income, and purchases and expenses, plus any adjustments (including the rate change adjustment), from the start of your return period until 30 September 2010. The GST calculation is at 12.5%, meaning your GST-inclusive sales and income, and purchases and expenses will be divided by nine (9) to find the GST component.
Part 2 for supplies at the new GST rate of 15%
In Part 2 you record your sales and income, purchases and expenses, and any adjustments from 1 October 2010 until the end of your return period.
The GST calculation is at the new GST rate of 15%, so your GST-inclusive sales and income, and purchases and expenses will be calculated by multiplying by 3 then dividing by 23 to find the GST component.
You'll need to add together the:
total GST collected on sales and income from Parts 1 and 2, and
any GST credit for purchases and expenses from Parts 1 and 2.
The difference between these two amounts will determine whether you have GST to pay, or a GST refund.
Completing your GST transitional return
You will need to:
separate any goods and services you have purchased and sold before and after the rate change
record these supplies on the appropriate part of the GST transitional return
complete and file your GST transitional return and make any payment by the return and payment due date.
We know all the accounting systems and software inside out, so to keep things running smoothly we are offering to step in to help you! The impact this change will have on your business may depend on what accounting system you are running. Being ahead of the game and knowing what to do will be the key as billing systems, purchasing systems, expense systems and accounting systems will be affected.
We have outlined some check points for each accounting system, some of the main issues may be:
· Will your accounting system cope with 2 different GST rates at the same time?
· Does your accounting software need to be updated?
· Maybe it’s time for a complete health check of your GST systems?
· Can your accounting software issue tax invoices, debit and credit rates at both old and new rates?
· What changes will be required to POS and till technology?
· When will GST rate compliant software updates be sent to you from your suppliers and how will you test those updates to make sure the new rates calculate correctly?
· Do you have any internal excel spreadsheets or other templates where the GST rate is ‘hard wired’ in? If so, each of these will need a careful review.
We will be supplying specific check sheets for each programme and we will touching base to take you through what you need to do.
Its worth mentioning that by signing up to Xero through Findlay and Co you save up to $100 per year...nice get in touch if this sounds like a bit of you!
You'll need to use the new 15% rate from your next return onwards, if:
you file your GST returns monthly, or
you are a two or six monthly filer that has a return period ending 30 September 2010.
GST periods that span 1 October 2010
If you are due to file a:
two monthly return with the period ending 31 October 2010, or
six monthly return with the period ending:
31 October 2010
30 November 2010
31 December 2010
31 January 2011
28 February 2011
you'll need to use the:
12.5% rate for the period up to and including 30 September 2010, and
15% rate for the period on and after 1 October 2010.
The IRD will be sending you new returns that will help you through the transitional period. You'll then go back to using your normal GST return. The returns will be printed with a red stripe to distinguish them from normal GST returns.
Posts
