Overview
Consumption taxes such as GST and VAT can have a material impact on forecast cash flow, so it is essential to set them up correctly from the start. Castaway includes flexible settings to model both the calculation of tax and the timing of lodgements and payments. Setup involves three steps:
- Set the standard tax rate
- Set the lodgement and payment timings
- Set the tax rate for each element
Step 1: Set the Standard Tax Rate
Navigate to Overview > Taxes > Edit to access the tax setup. This is typically configured when a Project is first created.
Set the GST/VAT rate for Sales and Purchases. This rate is applied to every new element by default and can be adjusted for individual elements separately where needed.
At this stage the GST/VAT Tax Method is limited to Invoice only, where the tax liability is recognised based on invoice timing rather than payment timing.
Step 2: Set the Lodgement and Payment Timings
Navigate to Forecast > Element Settings > Balance Sheet > Current Liabilities > GST/VAT and select either of the GST/VAT elements to open its settings screen.
Here you can configure how frequently GST/VAT returns are lodged to the relevant tax authority and the timing of payments or refunds arising from those returns.
| Setting | Description |
|---|---|
| Lodgement Method | Calculate - Castaway calculates the amount owing or refundable for each return. Manual - enter the values of each return yourself. |
| Lodgement Cycle | Set the frequency of your tax returns |
| Cycle End Month | Select the month that ends your lodgement cycle. Note this is the end of the cycle, not necessarily the month you lodge or pay. |
| Cashflow Method | Specify payment terms for each lodgement cycle to control the cash flow timing |
Lodgement Schedule Examples by Country
| Setting | Australia | New Zealand | United Kingdom |
|---|---|---|---|
| Lodgement Schedule | Quarterly | 2 Monthly (odd cycle) | Quarterly |
| Cycle End Month | Mar, Jun, Sep, Dec | Jan, Mar, May, Jul, Sep, Nov | As appropriate |
| Cash Flow Timing | Generally 28 days, 58 days for December | Generally 28 days, 45 days for November, 36 days for March | 37 days |
Step 3: Set the Tax Rate for each Element
The standard tax rate is applied to all new elements by default. If any elements require a different rate, navigate to the element settings for each affected element and update the rate accordingly.
Tax rates apply to the following element types:
- Sales
- Costs
- Inventory
- Provisions
- Other Asset/Liability
- Fixed Assets (Tangible)
- Fixed Assets (Intangible)
If you need any assistance please contact our support team at: support@castawayforecasting.com