A client who’s recently set themselves up in business has been confused by information his accountant gave him.
“Don’t worry about having a seperate bank account for your business”, he was told.
The Australian Taxation Office recommends that you should pay for business purchases from your business account wherever possible. These days that may mean EFTPOS or direct debit, and some small businesses still operate a chequebook.
There’s times when it’s not always practical, so minor purchases like postage stamps and parking may be paid for with petty cash.
The ATO tells us that you should keep receipts and invoices for your business purchases and then record the payments, whether you use cash from your takings or from your own pocket.
Also the ATO advises that you need a tax invoice to claim GST credits where the purchase is more than $82.50 (including GST). They tell us that if you request a tax invoice, your supplier must provide it to you within 28 days after your request, for purchases of more than $82.50 (including GST).
We’re not registered tax agents, so check with your accountant or tax agent regarding taxation matters
1st Quarter: 28/10/08
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