Q: The client's turnover for the year ending June 30, 2017, is expected to be $3.13 million, compared to $1.05 million in 2016. They run a business, not a charity or non-profit, and they handle income tax based on cash flow.
Are they still allowed to handle GST based on cash flow?
A: If a business's GST turnover is under $2 million, they can handle GST on a cash basis. But if it exceeds that threshold, they usually have to use a non-cash method, unless:
Their expected GST turnover stays under $2 million, They handle income tax based on cash flow, or They get permission from the tax authority.
Since the client handles income tax on a cash basis, they can use this method for GST, even though their turnover is over $2 million.
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