Setting up tax codes and linked accounts for portion of Private Use Expenses

If you intend to apportion the gst amount on a per transaction basis, although it is possible to create a consoildated tax code based on a % split between private and business use this

1. Does not split & allocate the expense to a private use account, (just the GST is split)

2. Is messy and complicated way of processing in MYOB

3. The ATO allows an annual adjustment if you are a small business see below from ATO website

When you can only claim a portion of a GST credit on a purchase, generally because the purchase is partly for business purposes and partly for private use, there are two ways of accounting for the GST credit:

• calculate the portion of GST credit that you are entitled to and claim it on your monthly or quarterly activity statement
• claim the entire GST amount as a credit on your monthly or quarterly activity statement and make a single adjustment annually.

This second option, with a single adjustment, is called annual private apportionment.

Your adjustment will either increase the amount of GST you are liable to pay or reduce your GST refund for the tax period you make the adjustment in.

If you still feel inclined to process on a per transaction basis, a better way is to split the expense

Example Telephone bill is $110 inc gst of which 50% is business & 50% Private

Enter as:

Telephone Expense $55 tax code GST

Owners Drawings or loan account $55 tax code FRE

Note also private use is longer entered on your BAS (The requirement to report has been removed)