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Stopping annual private apportionment

Last updated 31 October 2022

There are the 3 reasons you would stop using annual private apportionment.

Choosing to cancel

You can stop using annual private apportionment at any time. If you do, the cancellation will take effect from the start of the tax period for which your next activity statement is due.

You don't need to notify us of your decision but you must keep a record of your cancellation, including the date you decided to stop using annual private apportionment.

If your election to use annual private apportionment is cancelled in the financial year that you claimed the GST credit for the purchase, you must make an annual increasing adjustment on your activity statement either in:

  • the tax period in which the cancellation takes effect
  • an earlier tax period that you choose.

However, if the cancellation takes effect from 1 July in any year, your annual increasing adjustment will be made at the time you would have made it had your election not been cancelled.

Example: Date annual private apportionment ceases

Jasmine lodges her activity statement on a quarterly basis and uses annual private apportionment. She claims a GST credit on her purchases in the tax period ended 30 September 2016.

In February 2017 Jasmine decides not to use annual private apportionment any more. Her cancellation will take effect from the beginning of her current tax period. Her March 2017 activity statement period is 1 January 2017 to 31 March 2017, so she cannot use annual private apportionment from 1 January 2017.

Jasmine will need to complete her activity statement for the March 2017 quarter without using annual private apportionment. Jasmine will also have to account for her outstanding annual increasing adjustment in this activity statement.

End of example

We disallow your use

We can disallow your use of annual private apportionment if we find you have not complied with one or more of your tax obligations. Annual private apportionment will cease to have effect from the start of the tax period in which you are notified of the disallowance.

Where your choice to use annual private apportionment is disallowed in the financial year where you claimed the GST credit for the purchase, you must make an annual increasing adjustment on your activity statement either in:

  • the tax period in which the disallowance takes effect
  • an earlier tax period that you choose.

However, if the disallowance takes effect from 1 July in any year, your annual increasing adjustment will be made at the time you would have made it had your election not been disallowed.

If your annual private apportionment is disallowed and you are not satisfied with this decision, you can ask us to review it by submitting a request on online services.

No longer eligible

If you cease being a small business entity for an income year, your annual private apportionment is taken to have ceased on the first day of that income year.

If on 31 July you are carrying on an enterprise and your GST turnover exceeds $2 million, your annual private apportionment is taken to have ceased from the start of that financial year.

You must make any outstanding annual increasing adjustment at the time you would have made it had your turnover not exceeded the relevant threshold.

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