Q. Which SAM should I choose?
A. You should choose the method you are eligible to use that best suits your business. To help you decide, see the table under Which method can you use?
Q. If my projected turnover is more than the relevant turnover threshold before the end of the first 12 months, will I need to use a full accounting method from that point?
A. No. If you meet the turnover threshold requirements when you choose your SAM, you can continue using it for the remaining tax periods in that first 12 months. The threshold is a SAM turnover of $2 million or less for the business norms, snapshot and stock purchases methods, and a GST turnover of $2 million or less for the sales percentage and purchases snapshot methods.
However, you will not be eligible to use a SAM in tax periods that start after the first 12 months.
Q. If I buy adequate point-of-sale equipment part way through the year, do I continue to use the SAM for the rest of the year?
A. No. Once you have installed point-of-sale equipment that you are satisfied accurately identifies and records GST-free sales separately from taxable sales, you are no longer eligible to use the SAM you have chosen.
You must stop using this method from the beginning of the tax period after the day you purchased the point-of-sale equipment.
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This rule does not apply to the sales percentage method or the purchases snapshot method.
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Q. With the business norms method, why are the GST-free rates higher for hot bread shops than convenience stores?
A. The business norms percentages are based on the average values for each industry.
The percentages have been developed in consultation with a wide range of industry groups, including shop owners, industry representatives and peak bodies. Every industry has different characteristics and trading, so it makes sense that they have different levels of GST-free stock purchases and sales.
Q. Can I just estimate my GST-free sales but fully account for my purchases?
A. Only if you use either the stock purchases method or the snapshot method.
If you use the business norms method, you have to use the business norms percentages for your business type to calculate both your GST-free sales and your GST-free purchases. You cannot estimate the GST-free sales under the sales percentage and purchases snapshot methods.
Q. If I use a SAM, what happens if a customer needs a tax invoice to claim a GST credit?
A. If the price of a sale is $82.50 or less (including GST), you don't have to issue a tax invoice and your customer does not need one to claim the GST credit. Any documentary evidence (for example, cash register receipts) is sufficient.
If the price of the sale is for more than $82.50 (GST inclusive), you have to issue the tax invoice within 28 days to your customer. If your system can not generate a tax invoice then you must manually prepare one.
Q. With the snapshot method, if I start my business during the year, say in September, do I have to wait until a later tax period to start using the snapshot method? When should I take a snapshot of my trading?
A. No. If you start your business part way through the financial year, you can use the snapshot method for your first tax period, as long as your first sample period is in the first two months of trading.
Q. If my business has been operating for years, but I choose to use the snapshot method from 1 September, do I have to wait until the 1 December - 31 January sample period to do my snapshot of trading before I start to use the method?
A. No. Once you choose to use the snapshot method, you can conduct your first snapshot of trading and start using the snapshot method in the tax period when you make that choice.
Q. If my business has two activities (for example, fresh fish wholesaling and cooked fish and chip retailing), does the turnover threshold apply to my combined activities or separately to each activity?
A. The turnover threshold applies to the total turnover of your combined activities (as long as both activities are food retailing), not the turnover of each activity.
If the total turnover of your combined activities is $2 million or less, you can use SAMs for the food retailing parts of your business.
If the turnover from one of your activities is less than the turnover threshold, but the total turnover of your combined activities is more than $2 million, you cannot use any SAMs.
Special rules apply if you are a rural convenience store or pharmacy using the business norms method.
Last Modified: Wednesday, 14 November 2012