• Purchases and other costs

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    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    You need to know

    This represents the direct cost of materials used for manufacture, sale or exchange in deriving the gross proceeds or earnings of the business. It includes inwards freight. It also includes the cost of stock acquired when starting or acquiring a business during the year. It may also include some costs for labour and services provided under contract if these are recorded in the cost of sales account in your business books of account. If so, do not also include this amount as Contractor, sub-contractor and commission expenses.

    If you are a primary producer, you must include the value of your purchases from your livestock account at PP5 on your primary production worksheet.

    Completing this item

    Step 1, Work out the value of your primary production purchases and other costs directly related to trading stock. If you have more than one business, add up all your primary production purchases and costs.

    Step2, Write the total value of your primary production purchases and other costs directly related to trading stock at Purchases and other costs in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 3, Work out the value of your non-primary production purchases and other costs directly related to trading stock. If you have more than one business, add up all your non-primary production purchases and other costs.

    Step 4, Write the total value of your non-primary production purchases and other costs directly related to trading stock at Purchases and other costs in the Non-primary production column. Do not show cents.

    Step 5, Add up your primary production and non-primary production purchases and other costs directly related to trading stock and write the total at L.

    STS taxpayers

    If you are continuing in the STS this year and have chosen to continue using the STS accounting method, only show purchases and other costs that you have paid at L. (See STS taxpayers).

    Last modified: 01 Sep 2006QC 18499