ato logo
Search Suggestion:

Eligibility

Last updated 31 October 2022

Find out if you are eligible to claim a portion of a GST credit on a purchase.

Overview

Annual private apportionment can be used for GST credits on all purchases you make that are partly for business and partly for private purposes, unless:

  • the business portion of the purchase relates solely to making input-taxed supplies
  • any part of the purchase is a reduced credit acquisition – that is, a purchase that relates to making financial supplies that you can claim a reduced GST credit for.

If you make input-taxed financial supplies as a minor part of your business, you can use annual private apportionment for your purchases that relate to, making those supplies as long as you do not exceed the financial acquisitions threshold.

For more information about financial supplies and GST credits, see:

Accounting for the GST credit

If a purchase you make is partly for business purposes and partly for private use, you may be able to claim a portion of a GST credit.

There are 2 ways of accounting for the GST credit:

  • calculate the portion of GST credit that you are entitled to and claim it on your monthly or quarterly activity statement
  • claim the entire GST amount as a credit on your monthly or quarterly activity statement and make a single adjustment annually.

This second option with a single adjustment, is called annual private apportionment. Your adjustment to your current activity statement will either increase the amount of GST you are liable to pay, or reduce your GST refund for the tax period you make the adjustment in.

Who can use annual private apportionment

You can choose to use annual private apportionment if you are:

  • a small business with an annual turnover of less than $10 million, or
  • an enterprise (that is not a business) with a GST turnover of $2 million or less.

You can only use annual private apportionment if you lodge your GST returns on a quarterly or monthly basis, not if you pay GST by instalments or report GST annually.

For more information about GST credits, see Small business entity concessions.

GST groups

The representative of a GST group can only choose to use annual private apportionment if each member of the group satisfies the eligibility criteria.

Any decision made by the representative member to use annual private apportionment, or to stop using it, applies to each member of the GST group.

QC17872