Tourist parks: GST review - are you next under the ATO microscope?

The Australian Taxation Office (ATO) are undertaking audit and review activities to make sure that everyone is paying the correct amount of tax under the law. Business owners need to ask – Is my business claiming and paying the correct amount of GST?

There are a few areas in which tax legislation specifically applies to the accommodation sector. It is important to be aware of these so that your business can claim the correct level of GST entitlement.

What are the common issues?

Several common issues frequently arise in the accommodation sector. These include but are not limited to:

• Knowing how to distinguish between long-term and short-term tenant income and the options available to then account for GST on long-term tenants (i.e. stays for 28 days or longer)
• Incorrect rates used in property management systems when checking in guests that are later relied on when completing GST returns
• Claiming GST on capital expenditure when using the simplified method to account for GST
• What GST to you are entitled to claim when selling manufactured homes
• Overclaiming GST on motor vehicle purchase
• Not following potential GST clawback rules if an asset ceases to be a business asset within a defined period
• GST treatment of advance payments and deposits
• GST being applied to periodic hire purchase payments
• Identifying when GST is required to be paid on government grants or insurance payouts..

What are the benefits of a GST review?

A GST review will look at your quarterly Business Activity Statements (BAS), property management software, booking policies and accounting software to ensure that you are claiming and paying the correct amount of GST to the ATO. We compare your BAS lodgements with records within your accounting software and provide a letter of recommendation regarding your current practices. This process:

• Verifies that you are claiming the correct amount of GST
• Verifies that you are paying the correct amount of GST
• Provides recommendations for process and systems improvement
• Provides peace of mind that your current practices are within the law and, if not, recommendations of how to improve compliance
• Includes written recommendations regarding your current practices which may support your response to ATO enquiries, including audits and reviews
• Identifies opportunities to legally increase the amount of GST you claim on certain supplies.

Get in touch

To enquire about a GST review, or learn more about BDO’s tourist, caravan and holiday park services, contact your local BDO expert.