Invoicing and GST - it's not that hard peeps

We often field queries about supplier invoices. Our clients have received a document asking for payment but the document is missing vital information. It shouldn’t be difficult but some businesses make it so. The ATO have guidelines of what is constitutes a tax invoice and when should you charge GST. All the details can be found at the following link.

https://www.ato.gov.au/business/gst/tax-invoices/

The ATO states that for a sale over $82.50, a requested invoice must be provided within 28 days. The invoice must include:-

1. The words “Tax Invoice”
2. The seller’s identity
3. The seller's Australian business number (ABN)
4. The date the invoice was issued
5. A brief description of the items sold, including the quantity and the price
6. The GST amount (if any) payable – this can be shown separately or, if the GST amount is exactly one-eleventh of the total price, as a statement which says 'Total price includes GST'
7. The extent to which each line on the invoice is taxable

It isn’t part of the ATO rules, but my suggestion is also include your contact details (email and phone number) and your bank details. You’d be amazed how many times we see invoices that don’t tell you how to pay.

When you have checked the invoice is valid, what is the next step? If they are a new supplier and have charged GST, you need to check that they are GST registered. I have had two clients say to me just this week “I thought everyone charged GST”. Nope, this is not correct. Just like there are tax exempt goods and services,  there are also tax exempt or non-GST registered businesses. It goes in waves, but we often deal with a spate of client’s suppliers who charge GST and shouldn’t have. As a bookkeeper, you have to always be on alert for these. The trigger for me is if they are a sole trader. Firstly, you only need to register for GST if you earn more than $75,000 per year and secondly, these kind of business owners may not be as au fait with the business rules. See the link below for details on how and when to register for GST

https://www.ato.gov.au/Business/GST/Registering-for-GST/

To check if someone is GST registered, use the ABN Lookup tool. You should be checking all your supplier ABNs every 12 months to ensure your records are accurate. To do this, type the ABN into the search field. You could also search by company name. The link to the tool is below.

https://abr.business.gov.au/

The company and GST registration details will be displayed. If it doesn’t say “Registered from XXXXXX”, they are not eligible to charge GST and you should request they reissue their invoice.

It may not be a very sexy topic but by checking it's correct, you have just saved yourself some dosh!