Clearing down the GST Paid account?

Question

Hi there&nbsp;I am operating on a cash basisI have a "GST Paid" and "GST collected" account(s)in MYOB Account Right.Both are detail accounts in the "GST Liabilities" header account.&nbsp;The Context:My accountant does not seem to clear or zero-out these accounts at the end of the year, nor when I pay my BAS.They just keep building and building and building every year - e.g. thousands and thousands of dollars have been accrued over time in the "GST Paid" and "GST Collected" accounts.I don't want to ask my accountant because asking her anything is gonna give me a major headache, and she'll take 2 weeks to respond etc. not worth the headache.&nbsp;The Question:Is there a legitimate reason why this is not cleared or zero-ed out after i finalise the BAS every quarter, or when i finalise my returns at the end of the year?Thank youAny ideas or pointers would be much appreciated.

doreen_p · Answer

Hi koshyckoshy,
&nbsp;
Those balances aren’t cleared automatically when you finalise a BAS. They should be reduced when the BAS payment or refund is recorded against the relevant GST accounts. For a BAS payment, record a Spend Money transaction with a separate line for each BAS field, including the amounts for GST collected and GST paid. If you use separate GST Collected and GST Paid accounts, the payment can be allocated to those accounts directly. When the bank transaction comes through, match it to the Spend Money transaction rather than allocating it again. If those accounts have been building up over time, it may mean the BAS payments weren’t recorded against them, or were allocated to different accounts. Before correcting older balances, it’s best to check the treatment with your accountant. This guide has the steps and examples: Recording ATO payments and credits.
&nbsp;
Cheers,
Doreen

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Clearing down the GST Paid account?

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