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How does does GST adjustments for business or private use work?

by | Oct 14, 2022 | Uncategorized

There can sometimes be a blurred line between the personal use of business laptops, mobile devices and vehicles in your everyday life. This can make it confusing to allocate how much GST you can claim based on how much the asset is used.

In this situation, you will apportion the amount of GST you claim based on the percentage the good or service is used in your business. This can be measured in different ways for different assets and services.

If you are using a home office in your house, you can claim for the home office by comparing the floor area of your office to the total floor area of your home.

For work laptops and mobile devices, you will need to think about how much time, as a percentage, the devices are used for non-businesses purposes. This measurement is the same for other business-related supplies including printers and photocopiers.

One way that you can calculate a private use adjustment for a vehicle is by keeping a logbook and comparing private kilometers travelled with total kilometers travelled. However, there are a number of different ways to obtain income tax deductions for motor vehicle expenses. To figure out the most suitable strategy for your company, talk to your Walker Wayland Accountant.

When you purchase materials or services for your business, they must be used by the business. Therefore, If you take any stock home for your own use, you’ll need to let us know the dollar cost of this.

The Inland Revenue outlines that you can choose how you work out the percentage of business use, as long as it gives a fair and reasonable result. This can be based on past records, experience, business plans or another suitable method.

As there can be grey areas with calculating private use adjustments, you can contact your Walker Wayland Account if you have any questions about the private use of business assets and services and the GST implications from this.