How will GST affect the range of financial services your business uses? Here's a quick and easy guide to the impact of GST on:
What is GST
GST is a tax on goods and services of 10%. Generally a business registered for GST will collect GST from customers and claim back the GST through input tax credits on all of its business purchases. Businesses will remit the difference to the ATO.
GST may have an impact on your financial arrangements. Some financial services will attract GST while others will not.
Most business banking transactions are free of GST. Transaction, overdraft, cheque accounts, business loans and credit or charge card accounts you use for your business will be free of GST.
Some of the services involved in setting up a loan for your business will attract GST. These may include valuation and solicitor's fees. However, if you are a business registered for GST you may be able to reclaim the GST paid on those services as input tax credits.
GST may impact either positively or negatively on your cash flow so it is important for you to seek advice from your business advisers now.
Suncorp may be able to help you manage the change in your cash flow due to GST. You may be able to re-structure your repayments to match your cash flow. If you are a net payer of GST, you could maximise your return on these funds by investing them in a Suncorp interest earning account, until they are paid to the ATO.
If you will be a net receiver of funds from the ATO, Suncorp may be able to vary your existing loan to better meet your new cash flow situation.
GST applies to most general insurance policies, including those which Suncorp offers such as Commercial Motor, Commercial Property, Engineering and Construction, Liability, Marine, Professional Indemnity and Residential Property. The notable exclusions are overseas risks and marine (export) policies.
If you operate a business, you may be able to claim back from the ATO the GST you pay on your premium. But first you have to register with the ATO for GST and obtain an Australian Business Number (ABN).
Insurance premiums will continue to reflect changes in the cost of claims and the changes in the expenses incurred by insurance companies. The operation of the GST legislation will also affect both of these costs. The precise impact of GST and the other tax reforms on insurance will vary depending on the type of insurance product. Suncorp has taken care to ensure the savings we get from the new tax system have been passed on to our customers, so that underlying premium prices have been kept as low as possible.
GST and Insurance Claims - Registered Businesses
If your business is registered for GST, and you take out general insurance for business purposes, you will normally be entitled to claim input tax credits for GST included in your insurance premiums.
If you make a claim under your policy you will need to correctly advise us of the input tax credits you are entitled to claim on for your premium.
If you do this, you will generally not have to pay GST on your claim settlement.
GST and Insurance Claims - Non registered Businesses
If you are not registered for GST, you will be able to insure for full GST-inclusive amounts on any settlement. Your policy can cover GST costs, such as those involved in the replacement or repair of damaged goods.
Tax Invoices
Your Suncorp policy document will show the amount of GST that you have paid on your policy. If you require a tax invoice, you need to contact us (call 13 11 55) and we will send you a separate tax invoice document. A tax invoice is required in order to claim an input tax credit from the ATO.
Why is stamp duty being charged on top of the GST?
Stamp duties are legislated and collected on behalf of State Governments. Stamp duties still apply to insurance premiums inclusive of GST. The Insurance Industry has raised concerns with both Federal and State Governments over this issue in an attempt to have this addressed on behalf of insurance Policy Holders.
GST will not apply to life insurance premiums. This includes key man insurance, whole of life, term life, and endowment premiums or any life cover paid for under a superannuation plan, including corporate and industry superannuation plans.
The proceeds of maturing insurance policies do not attract GST. The proceeds of insurance policies from the death of the insured do not attract GST.
There will be no GST on income protection, trauma insurance and income protection premiums.
There'll be no GST on any part of a superannuation payout or on any rollovers, allocated pensions or annuities.
No GST is payable on Unit Trusts, Master Trusts, Wrap Accounts or Gearing Accounts.
You are able to claim input tax credits on Compulsory Third Party premiums
that relate to a period of insurance commencing on or after 1 July 2003.
GST applies to Suncorp lease rent agreement payments. If your business is registered for GST you should be able to claim input tax credits.
If you have an existing Lease Rent Agreement, the GST impact will depend on the type of agreement you have with us. Please call 1800 801 188 to confirm whether GST applies to your agreement.
In all cases however, GST will apply to the residual or early payout of your Lease Rent Agreement.
When you enter into an asset purchase or hire purchase agreement GST will be included in the purchase price of the goods. GST also applies to some components of the repayments. Please call an equipment finance specialist on 1300 65 11 25 for more information.
GST will apply to EFTPOS merchant fees but if your business is registered for GST you should be able to claim input tax credits.
GST is payable on debt collection services but if your business is registered for GST you should be able to claim input tax credits.
GST is payable but if your business is registered for GST you may be able to claim input tax credits.
Disclaimer
This brochure cannot be relied upon as a substitute for professional advice. No person should rely on the contents of this brochure without first obtaining advice from a qualified professional person. Before acting on any matter discussed in the article readers should discuss the matter with their professional adviser.
