Tax code for bank charge

Reckon Account Enterprise 2015

I want to confirm the tax code for general monthly bank fee. Is it blank like stamp duty and government rates and charges or is it NCI? From my understanding I know that bank charge should be input tax then it should be NCI tax code isn't it?

I am sure that there is GST on merchant fee, Commbiz and transaction fees but not monthly account keeping fees.

Comments

John Graetz

Hello Tam. General bank fees are regarded as being input taxed, according to information that I have and so the NCI code would be correct. However, you need to be careful when processing some other bank fees as they could have GST in them, such as Merchant Fees which you mention. But, in such circumstances, it is my understanding that the bank should be sending you either an invoice or some other communication indicating that GST is included. In the case of Westpac, they always send an Invoice when GST is included but they don't do this when no GST is included. The other trap to avoid is where you think that GST is included and the amount of the charge exceeds $82.50 - you cannot claim any GST at all, without that Tax Invoice. For that matter, you cannot GST on anything which exceeds $82.50 without a valid Tax Invoice. John L G

TamNguyen

Thanks John as always for your in depth response. As you mention, I do remember that we have separate statements from the bank indicating the amount of gst on merchant fee, but I didn't see any other statements for transaction fees, I called the bank though and they told me that transaction fees do included gst. But again I need to double check if they are exceeding $82.50 or not... Thank you for clarifying that for me.

Laurelle Searle

How do I process a bank charge refund?

Kris_Williams

A sales receipt with item of bank charge refund linked to the bank charges expense account, so whatever tax code you use on expenses, use the same tax code.

You can also use a journal entry if familiar with them

Laurelle Searle

HI Kris

Much appreciated thank you.

Kris_Williams

Glad you’re all sorted

Laurelle Searle

HI Kris

Sorry to bother you again but I just processed it in Sales Receipt and I could not get the Tax Code to accept NCF all it will accept is GST, FRE or INP. I had the item already setup it Item List so i just had to choose NCF tax code.

Do you have any suggestions?

Kris_Williams

Yes I have seen that before which is why I do a journal entry.

Go to company, make journal entry, on first line put bank charges and the amount in the credit column and tax code NCF

On the next line put the bank account and the amount in the debit column, no tax code. You can call me tomorrow if you need to. 0415940843

Laurelle Searle

Yes, thank you it did work I had tried this journal entry but I used the Tax code in both entries so it did not work for for me until I did as you suggested and left the tax code of the debit entry.

You have been wonderful, thanks again

Kris_Williams

Glad to be of help, any time.