• How do you work out your varied instalment amount if you are a new business?

    If you are new business and you become eligible to use the instalments option part way through a financial year, you can choose to use this option when you first become eligible.

    If you choose the instalments option part way through a year, you take into account any GST net amounts you paid or were refunded in earlier quarters when working out your varied instalment amount.

    Example 3

    Lyn is a landscape designer and registers her business for GST in July. She receives a net GST refund of $2,000 for the September quarter and pays a net GST amount of $13,000 for the December quarter. Lyn becomes eligible to use the instalments option for the March quarter and is notified that her instalment amount for the March quarter is $13,000.

    As Lyn estimates her annual GST liability to be $30,000, she decides to vary her instalment amount for the March quarter, as follows:

    Estimated annual GST liability

    $30,000

    Amount to be paid by March quarter ($30,000 x 75%)

    $22,500

    less the net GST amount paid for the September and December quarters ($13,000 - $2,000)

    $11,000

    Varied instalment amount for March quarter

    $11,500

    Lyn writes $11,500 as her varied instalment amount and $30,000 as her estimated annual GST liability on her March quarter activity statement, and also provides a reason code.

    End of example
      Last modified: 20 May 2014QC 16431