Q: Is you business ready for GST?
After much confusion, deliberation and consultation we decided to tackle the GST on two levels, one for clients and the other for our business.
Q: Is you business ready for GST?
After much confusion, deliberation and consultation we decided to tackle the GST on two levels, one for clients and the other for our business.
The past three issues of our newsletter included various articles about tax re-form and the GST, which were tailored to our client base. We sent letters to all self managed super funds outlining changes to regulations and what they should do concerning ABNs and the GST.
Since the announcement of the GST we have covered this issue during all reviews with clients and in some instances conferred with their accountants as well.
We also did a mass mailing to all clients and prospects about how our company will be handling the GST from 1 July 2000 and how our fees and charges will be effected.
We’ve also been completing a multitude of forms from fund managers, suppliers, etc. informing them of our ABN. We purchased an updated MYOB with GST and re-formatted our future invoices from 1 July.
With all of the above, I’m sure that there will still be many glitches for both clients and ourselves, but we are comforted by the back up by a good, pro-active accountant.
Laura Menschik, CFP
Managing Director
Millennium Financial Services Pty Limited
There are two aspects at Perpetual. Financial planners specifically at Perpetual are all salary employees and don’t receive commission, so GST is a bit of a breeze. There really hasn’t been anything for them to do.
As Perpetual is a licensed dealer of securities the whole company has had to de-velop an approach with the GST. A working party was formed in July last year. We developed a list of projects that we needed to develop, and it was an ongoing process of ticking off what we have identified.
What we have had to do is update all the computer systems and all the invoice systems. We run our own wrap accounts and that has required major upgrading as we take fees from there and make it capable of charging the GST.
We have also had to write to all fund managers to inform them of all ABN (Aus-tralian Business Numbers) numbers. It has been a big project from the company’s perspective. We’ve also had to write to all our clients and advise of fee in-crease due to GST.
Steve Davis
Perpetual
National manager of Financial planning for Private Clients
Yes we are ready. About three weeks ago we were definite, but the tax office keeps changing the rules all the time – they are still changing them as they speak.
You have to make sure you have a good accountant. Specifically we had to apply for an ABN and register for GST, design a tax enforce, and estimate the effect of price adjustments on our expenses to enable us to determine what we will be charging for financial planning and reviews after the 1 July 2000.
We’ve also had to keep track of the work in progress past 30 June 2000. What we will be trying to do is invoice by 30 June. The client is looking for that any-way, as they are looking for tax deductions.
We held seminars for clients which were very poorly attended – clients showed a particular lack of interest. We also provided free work booklets at the semi-nars – a lot of the questions they had to answer were in the booklets.
Lewis Waters
Partner
Peter Walker Partners Chartered Accountants
Sydney
There are three areas which are of concern for practitioners in regards to the GST. These are the relationship between clients and planner, the relationship with the dealer and the planner’s own financial position.
Our dealer has had a GST work party to go through the issues and practices have all been examined for input on expenses and revenues before making a final deci-sion on fees and the GST.
Our practice is mainly remunerated through fees so the GST will be passed on in full to clients. They were advised of this change and we asked for their agree-ment. We received a 100 per cent endorsement.
We have also been preparing the practice itself and looking at the accounting and office systems.
We believe we are quite well prepared going into something which is only a mat-ter of days a way.
The ultimate impact however will not be fully assessed until after the first PAYG event. There will be a learning curve that will be addressed as we go and more documentation becomes available.
Steve Garrett, Principal consultant
Godfrey Pembroke
Newcastle
