Chris Green of QNF Sales has uncovered an anomaly in the handling of GST of newspaper subscriptions which could have seen newsagent under claim GST. Following thorough research Chris contacted News Ltd and they confirmed that subscription credits to newsagents do not have any GST applied. As Chris has published…
We are now fairly certain, that due to the GST treatment of subscription credits, and subject to how Newsagents may be book-keeping their News Ltd statements; it is likely Newsagents who have customers subscribe directly to News Ltd; could be under-claiming their entitled GST.
Click here to see the details on the possible GST claim back opportunity for newsagents. For more on the excellent work on behalf of newsagents by Chris and QNF sales, click here.
The implications for newsagents receiving subscription credits could be considerable. After allowing for appropriate adjustments, newsagents could be entitled to credits reaching thousands of dollars – going back to 2006. Beyond the possible tax benefits, there could be implications for newsagents and their banking relationships as the research could result in some businesses being more successful on paper than they may have looked.
The work done by Chris for the newsagency channel is valuable. That he is sharing it widely ought to be appreciated by all newsagents. His research has been thorough and newsagents already are appreciating the results … I have spoken to a couple of are set to benefit to the tune of thousands of dollars.
Newsagents can contact Chris at Newsagencies For Sale Pty Ltd trading as QNF Sales by email at: cgreen@qnfsales.com.au.
There are plenty of newsagency brokers who claim to support newsagents. Few do this type of work which genuinely benefits the channel.
If you are a distribution newsagent and you have customers on News Limited subscriptions, check out your handling of GST today.
Thanks Mark and Chris. As a distribution agent turning over almost 2 million papers a year, with many of these on subscriptions, it will be well worth our while to check this out. Will let you know the outcome. Chris
Maybe this is a QLD thing, I checked out some invoices at random over the last 5 years and there was no problems.
Mark, I Had a GST ATO audit a few years ago, News has a Tax Ruling back to 2000 that allows the GST NOT to be 1/11th of the current weekly account. It all to do with returns. News did not go with the other publishers back in 1999/2000 in preparation for the GST, but sought their own tax ruling on GST for their accounts. JOhn
The key is for newsagents to research their own situation.
As with agencies like Ticketek, and lotto a newsagent only pays GST on the commission earned and not on the value
of the product sold.
Simple really.
I think most of the commentors have missed the point. Most agents when calculating gst divide the total by 11 and claim that amount. In reality they should only be claiming the amount nominated by News Ltd.
Can I just say as an accountant – be careful with this.
At the end of the day the common sense approach of net GST should be 1/11th of your GP on these products should be a guiding light.
Now because of rulings or product variations, whether that GST is calculated on Gross, Net, commissions, returns etc will change.
I stand to be corrected on that – but I was responsible for a nationwide audit on Telstra stores due to enquiries I made about rulings they had. It turned out many stores and accountants were following the rulings and information too narrowly and over claiming GST.
Sounds like it’s the reverse for you guys – but make sure you check it 100%. The last thing you want is for the ATO to knock back a refund, then issue a penalty for trying to over claim GST credits.
Looking at the QNF pdf. This looks VERY similar to the Telstra issue I found. If it is, depending on how you do your bookkeeping if you just went and claimed this “missing” GST you would be wrong. I won’t go into detail here on why, please consult your own accountant.
Be careful.
Blake if you read the information I have linked to it says exactly that.
I am not affected by my supplying newsagent is. He stands to get back $7,000 from the Tax Office because he did not claim the GST figure QNP put on their invoices. Chris deserves credit for this.