re: for milesg facts on gst and brokerage for crai Hi Miles,...

re: for milesg facts on gst and brokerage for crai Hi Miles,

Just read this thread and I have a question for you regarding GST on brokerage. I have only recently realised you can claim 75% of the GST on brokerage if you are running a share trading business. It's a reduced credit acquisition - Division 70 GST Act regarding financial supplies...

I rang the tax office and asked if it was possible to back date the date of registration for GST as you said earlier, in my case as far back as when the business was registered with an ABN in 2002. They said that this was fine and that you could register even further back than that, presumably to when the GST law came in.

However, they then advised me that there may be a penalty of $110 to $550 for each BA statement that was late over the whole 3-4 year period. Even more of a problem if you nominated a monthly cycle. The penalties could offset the gains you receive from GST credits and perhaps even make the exercise futile.

Treated this at first as sabre-ratting and the normal blanket approach which the ATO telephone operators are briefed to provide. I went on to explain that share/derivative trading is not subject to GST; it is classified as financial supply under the GST Act and treated as immune. By the way, this seems to be decided with regard to CFD's too - as per ATO GST ruling in 2005. I said that because my business has the character of finanical supply alone, it has never been required to be registered for GST. Its a voluntary thing.

Further exclaimed that I don't owe the ATO one cent in GST revenue. On the contrary it is the ATO which is obliged by law to remitt the GST credits to me when I claim them.. So why the penalties on late forms? (There is of course the cynical approach that the ATO is preventing a loss of revenue by denying legitimate, albeit late claims for GST credits).

So my question is: Did you get any penalties for back dating your GST registration? If not how did you avoid them, or is it simply all talk from the ATO about the penalties in this case?

Cheers mate

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