In most instances you can claim a credit for GST included in the price of any goods and services you buy for your business. However, when you make a business purchase and a portion will be used for private purposes or a non-deductible business expense, the amount of GST credit claimed needs to be adjusted.
Example
Your vehicle is used for 80% business purposes and 20% private. The GST credit allowed is only 80% of the total GST paid. Only that amount of the expenditure used for business purposes is reported for the purpose of claiming a tax credit.
Because of the particulars surrounding GST credits, visit the ATO website if you're in Australia, or the IRD website if you're in New Zealand, for detailed information on creditable amounts.
Typically you can record these types of purchases in AccountEdge by splitting the business and private purchases on each transaction and assigning separate tax/GST codes to each line. However, because of the specifics involved in determining which purchases are taxable, there's no "one size fits all" solution for setting this up.
Want to learn more?
We might not be experts in private use, but our community forum is a great place to connect with business professionals who are happy to share their insights.
