How to claim GST on deferred payments

Why claim GST on deferred payments?

If you have deferred payments on expenses, you may be able to claim GST before making the payment. Always check with your accountant to confirm whether GST can be claimed on specific items before they’re paid.

Common deferred items

The following items are commonly deferred through rural suppliers:

• Fertiliser
• Calf rearing items
• Animal health supplies

Understanding deferred payments

When importing a statement into Farm Focus, there are three key areas to check for deferred payment items:

1. Deferred amount(s): The statement will show the total amount deferred.
2. $0.00 value items: These indicate the items that have been deferred.
3. Deferred items with a dollar value: These lines show the actual cost of the deferred items.

TIP: Use a Farm Source statement as a reference to understand how deferred amounts are displayed.

Claiming GST on deferred payments

Follow these steps to claim GST on deferred expenses:

1. Locate the invoice line that refers to "This month not yet due" or similar.

   • The amount will be displayed as income to balance the invoice to the total amount due for the month.
   • Code this line to DF (Deferred Expenses).
   • GST type: Exempt (as GST is claimed on the related invoice lines).

2. Find the deferred items with a dollar value (refer to step 3 in the image).

   • Allocate relevant codes to these items on the invoice line (e.g., AH:D for drench).
   • GST type: Business

3. Delete the $0.00 lines that correspond to the same deferred items.

What to do when paying for deferred items

When making future payments for deferred items:

1. Code the payment to DF (Deferred Expenses).
   • The outstanding balance against this code will decrease.
   • Once the final payment is made, the DF code should show a $0.00 balance.
   • GST type: Exempt (as GST is has previously been claimed).

REMEMBER: Always consult with your accountant about the correct timing for claiming GST on deferred payments.