Do I have to keep GST debt in Dummy bank A/C?

Kyujo Choe

When I pay GST debt to ATO, I keep the transaction through Dummy A/C, and then transfer the amount from actual a/c to Dummy a/c. Do I still have to keep transaction this way or Can I keep the transaction as it happened as directly from NAB bank?

Sally McIntosh, Accredited Consultant

Hi Kyojo, Did your accountant set this up for you? As I agree with you that it seems like extra unnecessary entries. Kind regards, Sally McIntosh (sally@samsolutions.com.au)

Kwikbooks (Professional Partner)

Hi Kyojo

I would presume the purpose of the dummy bank account is so you can reconcile to the ATO client account.

You can set up a 'supplier' called ATO client account, you can enter your BAS/IAS as a bill, then come back and pay the bill off, this way you can pay by installments to the ATO and keep track of how much is owed.

You can also manually reconcile to the ATO client account and pick up any interest owed or credited etc, and enter as a bill or credit..... make sure you DO NOT USE the automatic generated supplier 'Australian Taxation Office' as this is used by the system to track gst from every transaction and will  not reflect what is truly owed or lodged with the ATO - make the 'Australian Taxation Office' inactive in your supplier list.

Kyujo Choe

I have done this process by the instruction of QB adviser few years before. So now I wonder it is still necessary. I pay GST quartly. So you think it is unneccessary process. Thank you for your advice.

Kyujo Choe

Thanks for your comment. Let me ask a question. I pay GST quartly only. If I do not use dummy bank account for GST payment, is there any problem?

Kwikbooks (Professional Partner)

No.. as long as the payment, be it in cheque or bill format is entered correctly, showing the amount of money coming from the GST liability account and the PAYG liability account if you have payroll, also rounding account if required.

I always verify the BAS with the tax liability report & payroll totals for the quarter, and enter the amounts in the GST Liabilty & PAYG Liabilty account including cents, then round the cents off to make it whole dollars as lodged with the ATO.

Kyujo Choe

I thank you very much for your good explanation. I am fully understand it. I used BAS calculation by Recokon hosted. As it tells me, I pay Tax liability from Bank account. Thanks Kim.