So you have been getting the CashFlow Boost and now ready to record it in an accounting package in accordance with the ATO.
"Tax consequences
You do not need to pay tax on the amount of the cash flow boost. However, if you distribute the cash flow boost from the business to another entity (for example, making a trust distribution or paying a dividend to shareholders) there may be tax consequences for the recipient.
The cash flow boost is not subject to GST as you are not making or agreeing to make a supply for the payment.
You will still be entitled to a deduction for PAYG withholding paid.
There is no effect on tax paid by employees in respect of their salary and wages."https://www.ato.gov.au/
So... to correctly set up your Chart of Accounts in Intuit QuickBooks Online
Reproduced with thanks, from the Intuit Quickbooks Online Pro Advisor Help feature as a Standard Operating Procedure Guideline for Tradies Bookkeeping .Com
The process has four steps:
Set up a clearing account to record the BAS payment
Set up an Other Income account to record to CashBoost payment you will receive
Make a Journal Entry to ensure the transactions are recorded correctly
Match the transaction when it comes through your bank feed.
1. How to set up a clearing account
Note: A clearing account can be used when money will be received but hasn’t yet been paid.
Select Accounting and then Chart of Accounts from the left hand menu
Select New
Select the Account Type Cash and cash equivalents and the Detail Type of Cash and cash equivalents
Enter the Name as Cash Boost Clearing
Select Save and Close
2. How to set up an Income account for the CashBoost Stimulus
Note: we recommend you reach out to your accountant or bookkeeper to ensure this account is set up for your business correctly.
Select Accounting and then Chart of Accounts from the left hand menu
Select New
Select the Account Type Other Income and the Detail Type of Other miscellaneous income
Enter the Name as ATO Cash Boost Stimulus
Select Save and Close
3. How to make a Journal Entry
The next step differs depending on whether you receive a refund, are still required to make a payment or if the no money will be received or is owing.
For this example, we’ll use the following scenario:
The GST Payable is $10,000 and the Cash Boost is $15,000 this means you will a refund of $5000 from the ATO
Select GST from the left hand menu
Select Record Payment from the Actions column of the relevant Lodged BAS
Select Cash Boost Clearing from the drop down menu.
Enter in $10,000 into the Payment amount field
Select Save
Select + New button from the left hand menu and choose Journal entry
In the first line enter a Debit of $10,000 to the Cash Boost Clearing account
In the second line enter a Debit of $5,000 from your bank account you will be making the payment from.
In the third line enter a Credit of $15,000 to the ATO Cash Boost Stimulus account
For this example, we’ll use the following scenario:
The GST Payable is $10,000 however the Cash Boost is $8,000 this means you are still required to pay $2000 to the ATO.
Select GST from the left hand menu
Select Record Payment from the Actions column of the relevant Lodged BAS
Select Cash Boost Clearing from the drop down menu.
Enter in $10,000 into the Payment amount field
Select Save
Select + New button from the left hand menu and choose Journal entry
In the first line enter a Debit of $10,000 to the Cash Boost Clearing account
In the second line enter a Credit of $2,000 from your bank account you will be making the payment from.
In the third line enter a Credit of $8,000 to the ATO Cash Boost Stimulus account
Note: You’ll still need to make the adjusted payment to the ATO as normal
For this example, we’ll use the following scenario:
The GST Payable is $10,000 and the Cash Boost is $10,000 this means you won’t receive a refund or owe the ATO any money.
Select GST from the left hand menu
Select Record Payment from the Actions column of the relevant Lodged BAS
Select Cash Boost Clearing from the drop down menu.
Enter in $10,000 into the Payment amount field
Select Save
Select + New button from the left hand menu and choose Journal entry
In the first line enter a Debit of $10,000 to the Cash Boost Clearing account
In the third line enter a Credit of $10,000 to the ATO Cash Boost Stimulus account
4. Match the transaction when it comes through your bank feed
The final step will be to match the journal entry in banking as you would normally.
If you need any help with ensuring you are getting what you are entitled to by setting up your Intuit QuickBooks Online Accounting Package correctly, please so not hesitate to get in touch. We are set up with Zoom to share screen shots and help you get every step right. Click here to register your interest.
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