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N-T AND FRE

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CH123
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CH123
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N-T AND FRE

Hi

 

Could someone please help as I'm getting more confused the more I think about the difference between the tax codes N-T and FRE.

 

When should you use N-T instead of FRE.  We are registered for GST.

 

Thanks

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Ultimate Partner ronatbas
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ronatbas
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Re: N-T AND FRE

@CH123

 

Many people will click away from this query on the grounds that it is a tax question and by legislation BAS/Tax Agents are not permitted to offer tax advice in a forum such as this. The comments below are history and then there is a statement on how they have affected tax to this day.

The coalition government, when it brought in the GST, were still suffering from John Hewson's appalling handling of the Christmas cake issue where Keating won the unwinnable election. Food was in the most part exempted from GST ie FRE.  To appease the pensioner lobby  Financial Institutions Fees and Interest also became FRE.

It was also determined that Medicine and Education and motor registration  should be GST Free.

Not Reportable has been around forever - matters that do not attract the attention of the tax man and are of purely an internal nature. Directors paying money into a company, taking that money back again is not a taxable issue. Transfers between company (bank/CC) accounts are not part of the GST world.

There is also another rule that is generally accepted in accounting - that there should not be a tax on a tax. This impacts on many businesses in Australia that own a motor vehicle in the business name.

 

So how does all this work today - suppliers should tell you if they are not charging GST (ie FRE) on certain goods. Often they tell you the amount of GST charged and this is less than 1/11 of the total. This needs particular treatment in MYOB that is covered in other threads.

Have a look at your Motor registration it contains 

Registration which is FRE

Stamp Duty which is N-T

Third Party insurance which is GST

This may vary from state to state as some have never caught up with idea of paying all of you car bills to one lot and at one time, and have them distribute the to relevant businesses.

Most of the other bills that you will receive are either GST or FRE or a mixture of the two. In general terms there is little on the P & L accounts, aside from Payroll/Super that are N-T. 

Hope this gets you along the way

Ron B
BAS Group
03 95588477

info@basgroup.com.au
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