bookkeeping for goods

Bookkeeping for Goods Taken From Business for Private Use

In every part of the world, business owners usually consume stock for their personal needs and requirements. It is a common practice in various industries and business types. However, it mostly occurs among grocers, cafes, bakers, delis restaurants, butchers and general stores. Is it a matter of serious attention? Yes, it is as Australian Taxation Office has rendered certain implications upon it. Using the business stock for private needs changes the value of consumed items/stock which adds to the individual’s taxable income. You have to maintain proper bookkeeping Sydney to keep track on those.

This practice usually makes the tax return complicated due to which ATO has published the standardized values which exclude General Sales Tax on commodities of different businesses. These are the commodities used by owners for personal use. The owner must keep in mind that it’s necessary to save the records and update those regarding Goods Used For Personal Needs to have no issues in filing tax return. Australian Taxation Office takes the responsibility for changing and updating the standardized values of these commodities on yearly basis. We have discussed and mentioned the values issued by authorities for the financial year 2013/2014. Take a look at them for gaining better understanding.

  • Bakery: excluded GST amount for adult 16 years+ is $1,310 and excluded GST amount for child between 4 to 16 years is $655.
  • Butcher: excluded GST amount for adult 16 years+ is $780 and excluded GST amount for child between 4 to 16 years is $390
  • Licensed café/restaurant: excluded GST amount for adult 16 years+ is $4,400 and excluded GST amount for child between 4 to 16 years is $1,705
  • Unlicensed café/restaurant: excluded GST amount for adult 16 years+ is $3,410 and excluded GST amount for child between 4 to 16 years is $1,705
  • Caterer: excluded GST amount for adult 16 years+ is $3,690 and excluded GST amount for child between 4 to 16 years is $1,845
  • Delicatessen: excluded GST amount for adult 16 years+ is $3,410 and excluded GST amount for child between 4 to 16 years is $1,705
  • Greengrocer/fruiter: excluded GST amount for adult 16 years+ is $760 and excluded GST amount for child between 4 to 16 years is $380
  • Food shop for take away: excluded GST amount for adult 16 years+ is $3,300 and excluded GST amount for child between 4 to 16 years is $1,650
  • Convenience store or mix business for FMCG products: excluded GST amount for adult 16 years+ is $4,100 and excluded GST amount for child between 4 to 16 years is $2,050

If you are wondering whether this information is true or not, we would like to inform you that one cannot afford to take this carelessly. ATO has made these regulations and values applicable to all the businesses mentioned in the list. The owner of business or his bookkeepers Sydney is liable to write the goods taken from stock for personal use as his/her assessable income which has tax implications. The common issue being faced by people in this matter is the inaccurate records available. Don’t forget to keep up to date record for the goods taken out of business with certain proof. It will help your taxation procedures to be exact and swift.

The businesses and industries where such inaccuracy of records usually occurs is due to various reasons including:

  1. In baking business, the usage of goods during transformation procedure or manufacturing
  2. Low valued small items such as ingredients
  3. Items which don’t go with inventory recording system

The Australian Taxation Commissioner publishes the standardized value which he/she will be accepting without any requirement of records (bookkeeping services Sydney) for the above mentioned few items and reasons only. On the other hand, trading stock needs to have authentic proof and record for it being used in personal needs. It is necessary so that the commissioner could confirm that accurate amount has been mentioned in assessable income’s header. We have briefly mentioned the records you need to keep for this purpose:

  • Date when the specific commodity was taken for use
  • Specific reason for which commodity was taken
  • Item’s brief description
  • Market value or cost of particular commodity

The business owner should consider the values provided by taxation office as general guide. The whole purpose of keeping the records and several implications is that business owners should be able to demonstrate and prove that stock taken out from business for personal use was reasonable and fair. The authorities are not insensitive to the case where it’s a normal practice abide by the law where an owner can take out goods for personal use anytime. However, being an owner it is your job to justify the amounts mentioned in tax return and assessable income’s column. Hope you found today’s editorial helpful. In case you have any queries, please directly contact the ATO.