Handling Layby payments in Australian BAS and Business Tax Returns

Legacy KB ID: 5519

Question

How do I apply Layby payments to correctly reflect in my BAS returns and Business Tax calculations?

Answer

You should refer to your Accountant for specific guidance.

You should be aware of the ATO’s Tax Ruling GSTR 2000/12, TR 95/7 and any other relevant notes.

The procedures vary slightly according to whether you are reporting on a Cash or Accrual basis:

·         Cash basis recognises the tax event when a payment is received for the amount of the payment, regardless of the amount or whether the Layby is fully paid;

·         Accrual basis recognises the tax event when the Layby is fully paid, regardless of when and the number of intermediary payments. 

·         Layby reports from Point of Sale Administrator will help with the process.

 

Directions for Cash basis reporting

Apply payments received on Laybys to the Layby customer invoices in Reckon Accounts. 

See the KB ‘Applying Reckon Point of Sale Layby Payments in Reckon Accounts’ for full details.

 

Direction for Accrual basis reporting

Reckon Accounts accrual basis treats an invoice as a tax event on the date of the invoice.  The layby invoice must be adjusted to exclude it until full payment is received.

1.    Mark layby invoices (and Adjustment Notes) as pending until final payment is received

2.    When final payment for a layby is received:

a.    mark the layby invoice (and any related Adjustment Note) as Final, and,

b.    re-date that invoice (and Adjustment Note) to the final payment date.

3.    Apply the payments (and Adjustment Notes if any) to the invoice

See the KB ‘Applying Reckon Point of Sale Layby Payments in Reckon Accounts’ for full details.

Please Note, if you have taken a non-refundable deposit, that deposit is treated as a completed sale (TR 95/7 points 5 and 7) and any tax associated with it is recognised on that date.  Consult your Accountant regarding this matter.

 

Additional Notes

If tracking tax on an accrual basis on POS 2016 or earlier editions, instead of making the unpaid invoices and adjustment notes pending, you could redate them to a far future date so that they don’t affect your tax reports. Then when final payment is made, redate them to the final payment date and apply the payments.

Note that from POS 2017 onwards, the format of layby invoices and adjustment notes sent to Reckon Accounts has changed slightly, so that they can be set to Pending if needed in Reckon Accounts.

 

Need more help?

Ask the Reckon Community at: https://community.reckon.com/

Or Log a Support Ticket: https://www.reckon.com/au/support/

How did we do?

Error Obtaining Security Token during List Request in GovConnect

BAS window doesn’t fit on the screen

Related Articles

Applying POS Layby payments to a Reckon Accounts Tax Invoice for Layby
Cannot refund Layby if initial payment was included in the Layby Sale
Handling No ABN Withholding tax Reckon Accounts Business and QuickBooks.
Powered by HelpDocs (opens in a new tab)

Powered by HelpDocs (opens in a new tab)